The prospects of Greece as a country with a strong economy continued as a reality since independence in 1974 and thanks to the industrial revolution of the 19th century among other factors, its local currency, the Drachma was exchanged to Euro at the rate of 340.75 at its point of Euro currency adoption in 2001. Its relevance as an advanced economy with a very healthy GDP earned it a place as a foundation member of international organisations like OECD (Organisation for Economic Cooperation and Development) and BSEC (Organisation of the Black Sea Economic Cooperation). The tide was continually good; GDP was on the rise and Greece was, in fact, a healthy leading European economy until the bust in 2009.
The details of the crises that erupted in 2009 came to fore in the early part of 2010 when the involvement of organisations like JPMorgan Chase, Goldman Sachs and a host of other banks who developed financial products that helped the Greek government, among other European countries, decided to keep the details of their borrowings away from public knowledge. This was tagged the late 2000s crises and it was combined with the European sovereign debt crisis. Its public debt stood at €355.658 billion in 2011 representing 170.6% of its nominal GDP. Greece was able to reduce its sovereign debt burden to €280 billion in 20121.
Between 2009 and 2011, the GDP per capital of Greece fell from 94% to 79% and there was a fall in Actual Individual Consumption (AIC) from 104% to 91% on an EU average. The crisis resulted in higher unemployment than ever recorded, going from 7.2% to 27% by November 2012 with youth unemployment reaching a 61.7% level.
The growth rate of Greece’s economy recorded a drop into the negative zone starting from 2008 with records such as
- -0.2% in 2008
- -3.1% in 2009
- -4.9% in 2010
- 5.8% in 2011
References:
- First data for the years 2008-2011. Piraeus: Hellenic Statistical Authority. 22 October 2012.
- Greece Paid Goldman $300 Million to Help it Hide its ballooning debts. Business inside.
