FROM: U.S. STATE DEPARTMENT
GREECE
Official Name: Hellenic Republic
PROFILE
Geography
Area: 131,957 sq. km. (51,146 sq. mi.; roughly the size of Alabama).
Major cities: Capital--Athens. Greater Athens (pop. 3,566,060), municipality of Athens (772,072), Greater Thessaloniki (1,057,825), municipality of Thessaloniki (363,987), Piraeus (175,697), Greater Piraeus (466,065), Patras (171,616), Iraklion (137,711), Larissa (126,076).
Terrain: Mountainous interior with coastal plains; 1,400-plus islands.
Climate: Mediterranean; mild, wet winter and hot, dry summer.
People
Population (2010 est.): 11,295,002.
Population growth rate (2010 estimated): 0.1%.
Languages: Greek (official). English is the predominant second language.
Religions: Greek Orthodox (approximately 98% of citizens), with Muslim, Jewish, Catholic, Protestant, and other religious communities.
Education: Years compulsory--9. Literacy--97.5%. All levels are free.
Health: Infant mortality rate--5.43/1,000. Life expectancy--male 77.69 years, female 82.35 years.
Work force (2009 estimated): 5.0 million.
"Athens At Night From Space" Image courtesy of the Image Science & Analysis Laboratory, NASA Johnson Space Center Government
Type: Parliamentary republic.
Independence: 1830. National Day: March 25 (1821).
Constitution: June 11, 1975, amended March 1986, April 2001, May 2008.
Branches: Executive--president (head of state), prime minister (head of government).Legislative--300-seat unicameral Vouli (parliament). Judicial--Supreme Court, Council of State.
Political parties: Panhellenic Socialist Movement (PASOK), New Democracy (ND), Communist Party of Greece (KKE), Popular Orthodox Rally (LAOS), and Coalition of the Left (SYNASPISMOS).
Suffrage: Universal and mandatory at 18.
Administrative subdivisions: 13 peripheries (regional districts); 325 municipalities; two wider metropolitan area administrative councils to encompass the whole of the Attica region and the Thessaloniki agglomeration.
Economy
GDP (2010): €227 billion (about $312 billion).
Per capita GDP (2010): $27,875.
Growth rate (2010): -3.5%.
Inflation rate (2010): 4.7%.
Unemployment rate (annual average, 2010): 12.5%.
Natural resources: Bauxite, lignite, magnesite, oil, marble.
Agriculture (3.3% of GDP): Products--sugar beets, wheat, maize, tomatoes, olives, olive oil, grapes, raisins, wine, oranges, peaches, tobacco, cotton, livestock, dairy products, rice, figs.
Manufacturing (17.9% of GDP): Types--processed foods, shoes, textiles, metals, chemicals, electrical equipment, cement, glass, transport equipment, petroleum products, construction, electrical power.
Services (78.8% of GDP): Maritime, transportation, tourism, communications, trade, banking, public administration, defense.
Trade: Exports (2010): $22 billion: manufactured goods, agricultural products, beverages, tobacco, petroleum products, cement, chemicals. Major markets--Germany, Italy, Cyprus, Bulgaria, Turkey, U.K., France, U.S., Romania, Spain. Imports (2010)--$64.55 billion: basic manufactures, food and animals, crude oil, chemicals, machinery, transport equipment.Major suppliers--Germany, Italy, China, France, Netherlands, U.S., Russia.
PEOPLE
Greece was inhabited as early as the Paleolithic period and by 3000 BC had become home, in the Cycladic Islands, to a culture whose art remains among the most evocative in world history. In the second millennium BC, the island of Crete nurtured the maritime empire of the Minoans, whose trade reached from Egypt to Sicily. The Minoans were supplanted by the Mycenaeans of the Greek mainland, who spoke a dialect of ancient Greek. During the Roman, Byzantine, and Ottoman Empires (1st-19th centuries), Greece's ethnic composition became more diverse. The roots of Greek language and culture date back at least 3,500 years, and modern Greek preserves many elements of its classical predecessor.
Eastern Orthodox Christianity is the dominant religion in Greece and receives state funding. During centuries of Ottoman domination, the Greek Orthodox Church preserved the Greek language and cultural identity and was an important rallying point in the struggle for independence. There is a centuries-old Muslim religious minority concentrated in Thrace and an estimated 300,000 legal Muslim immigrants living elsewhere in the country. Smaller religious communities in Greece include Old Calendar Orthodox, Catholics, Protestants, Jews, Jehovah's Witnesses, and Mormons.
Greek education is free and compulsory for children between the ages of 6 and 15. Overall responsibility for education rests with the Ministry of National Education and Religious Affairs. Private colleges and universities (mostly foreign) have campuses in Greece despite the fact that their degrees are not recognized by the Greek state. Entrance to public universities is determined by state-administered exams.
HISTORY
The Greek War of Independence began in 1821 and concluded in 1830 when England, France, and Russia forced the Ottoman Empire to grant Greece its independence under a European monarch.
At independence, Greece had an area of 47,515 square kilometers (18,346 square mi.), and its northern boundary extended from the Gulf of Volos to the Gulf of Arta. Under the influence of the "Megali Idea," which in its most broad interpretation meant the expansion of the Greek state to include all areas where significant Greek communities existed, Greece acquired the Ionian islands in 1864; Thessaly and part of Epirus in 1881; part of Macedonia, Crete, Epirus, and the Aegean islands in 1913; western Thrace in 1918; and the Dodecanese islands in 1947.
Greece entered World War I in 1917 on the side of the Allies. After the war, Greece took part in the Allied occupation of Turkey, where many Greeks still lived. In 1921, the Greek army marched toward Ankara, but was defeated by Turkish forces led by Kemal Mustapha Ataturk and was forced to withdraw. In an exchange of populations under the Treaty of Lausanne, more than 1.3 million refugees from Turkey poured into Greece, and nearly 800,000 Greek Turks were sent to Turkey. This large influx of people created enormous challenges for the Greek economy and society.
Greek politics, particularly between the two world wars, involved a struggle for power between monarchists and republicans. Greece was proclaimed a republic in 1924, but George II returned to the throne in 1935. A plebiscite in 1946 upheld the monarchy, which was finally abolished by referendum on December 8, 1974.
Greece's entry into World War II was precipitated by the Italian invasion on October 28, 1940. Despite Italian superiority in numbers and equipment, determined Greek defenders drove the invaders back into Albania. Hitler was forced to divert German troops to protect his southern flank and overran Greece in 1941. Following a very severe German occupation in which many Greeks died (including over 90% of Greece's Jewish community) German forces withdrew in October 1944, and the government-in-exile returned to Athens.
After the German withdrawal, the principal Greek resistance movement, which was controlled by the communists, refused to disarm. A banned demonstration by resistance forces in Athens in December 1944 ended in battles with Greek Government and British forces. Continuing tensions led to the outbreak of full-fledged civil war in 1946. First the United Kingdom and later the U.S. gave extensive military and economic aid to the Greek Government. In 1947, Secretary of State George C. Marshall implemented the Marshall Plan under President Truman, which focused on the economic recovery and the rebuilding of Europe. The U.S. contributed hundreds of millions of dollars to rebuild Greece’s buildings, agriculture, and industry.
In August 1949, the Greek national army forced the remaining insurgents to surrender or flee to Greece's communist neighbors. The insurgency resulted in 100,000 killed, 700,000 displaced persons inside the country, and catastrophic economic disruption. This civil war left Greek society deeply divided between leftists and rightists.
Greece became a member of NATO in 1952. From 1952 to late 1963, Greece was governed by conservative parties--the Greek Rally of Marshal Alexandros Papagos and its successor, the National Radical Union (ERE) of Konstantinos Karamanlis. In 1963, the Center Union Party of George Papandreou was elected and governed until July 1965. It was followed by a succession of unstable coalition governments.
On April 21, 1967, just before scheduled elections, a group of colonels led by Col. George Papadopoulos seized power in a coup d’état. The junta suppressed civil liberties, established special military courts, and dissolved political parties. Several thousand political opponents were imprisoned or exiled to remote Greek islands. In November 1973, following an uprising of students at the Athens Polytechnic University, General Dimitrios Ioannides replaced Papadopoulos and tried to continue the dictatorship.
In July 1974, the Greek junta sponsored a coup in Cyprus led by extremist Greek Cypriots against the government of President Makarios, citing his alleged pro-communist leanings and his perceived abandonment of enosis, or political union with Greece. Turkey, citing the 1960 Treaty of Guarantee, intervened militarily to protect Turkish Cypriots. In a two-stage offensive, Turkish troops took control of 38% of the island. Almost all Greek Cypriots subsequently fled south while almost all Turkish Cypriots moved to the north.
Senior Greek military officers withdrew their support from the junta, which toppled. Leading citizens persuaded Karamanlis to return from exile in France to establish a government of national unity until elections could be held. Karamanlis' newly organized party, New Democracy (ND), won elections held in November 1974, and he became Prime Minister.
Following the 1974 referendum, the parliament approved a new constitution and elected Constantine Tsatsos as president of the republic. On January 1, 1981, Greece became the 10th member of the European Community (now the European Union--EU).
Parliamentary elections were held March 8, 2004, and ND won 165 seats to the Panhellenic Socialist Movement’s (PASOK) 117; Konstantinos Karamanlis, ND leader and the nephew of the former prime minister of the same name, became Prime Minister. Karolos Papoulias was elected President by parliament in February 2005. On October 4, 2009, PASOK won an early parliamentary election with 160 seats to ND’s 91. PASOK leader George Papandreou succeeded Karamanlis as Prime Minister. On February 3, 2010, Papoulias was re-elected President by parliament with a majority of 266 votes out of 300. On November 11, 2011, Papandreou stepped down as prime minister to make way for a coalition government led by Lucas Papademos (PASOK).
GOVERNMENT AND POLITICAL CONDITIONS
Greece is a parliamentary republic and last amended its constitution in May 2008. There are three branches of government. The executive includes the president, who is head of state, and the prime minister, who is head of government. There is a 300-seat unicameral "Vouli" (legislature). The judicial branch includes a Supreme Court. Greece is implementing a program (“Kallikratis”) that reorganized and consolidated its system of local governments into 13 regional districts and 325 municipalities. Suffrage is universal at 18.
Domestic Terrorism
Terrorist activity in Greece decreased during 2011, continuing the trend of Greek authorities successfully dismantling groups that had been active from the 1970s to the late 2000s. In the summer of 2002, Greek authorities captured numerous suspected members of the terrorist group "November 17." In 2003, 15 members of the terrorist organization, which since 1975 had killed many prominent Greeks and five U.S. Mission employees, were found guilty and convicted of a number of crimes, including homicide. In 2007, an appellate court acquitted two of the defendants, but otherwise largely upheld the results of the initial trial, leaving the leadership of the defunct group serving multiple life sentences and others serving long prison terms. The defendants exhausted their appeals in the Greek legal system in 2010.
On January 12, 2007, terrorists fired a rocket-propelled grenade that struck the U.S. Embassy. The terrorist group Revolutionary Struggle later claimed responsibility for the act. Revolutionary Struggle also claimed responsibility for a number of other attacks on Greek officials, police, financial institutions, and other targets. In April 2010, police arrested six suspected members of Revolutionary Struggle, and discovered hideouts containing bombs, rocket launchers, attack plans, and other evidence connected with the group. An additional group, Sect of Revolutionaries, claimed responsibility for shooting attacks on police, including the murder of an anti-terrorist unit officer in June 2009, as well as the murder of a Greek journalist in July 2010. In March 2010, the "December 6" terrorist organization claimed responsibility for a bomb attack that killed a 15-year-old Afghan immigrant. In June 2010 an aide to the Minister of Citizen Protection was killed when he opened a package addressed to the Minister. A domestic terrorist group called Conspiracy of Fire Nuclei (SPF) claimed responsibility for a number of bomb attacks of varying size between 2008 and 2010. Authorities arrested 26 SPF suspects for offenses that included sending over a dozen parcel bombs to foreign embassies in Athens and political leaders in Europe in late 2010, and bombings at the residences of both ND and PASOK politicians. Six suspects have been convicted, another five were acquitted or charges dropped, and the rest are awaiting trial.
Principal Government Officials
President--Karolos Papoulias
Prime Minister--Lucas Papademos
Foreign Minister--Stavros Dimas
Minister of Defense--Dimitris Avramopoulos
Minister of Citizen Protection--Christos Papoutsis
Ambassador to the United States--Vassilis Kaskarelis
Ambassador to the United Nations--Anastasios Mitsialis
ECONOMY
Greece adopted the euro (€) as its currency in January 2002. The adoption of the euro provided Greece (formerly a high inflation risk country under the drachma) with access to competitive loan rates and also to low rates of the Eurobond market. This led to a dramatic increase in consumer spending, which gave a significant boost to economic growth. Between 1997 and 2007, Greece averaged 4% GDP growth, almost twice the European Union (EU) average. As with other European countries, the financial crisis and resulting slowdown of the real economy have taken their toll on Greece’s rate of growth, which slowed to 2.0% in 2008. The economy went into recession in 2009 and contracted by 2.4% as a result of the world financial crisis and its impact on access to credit, world trade, and domestic consumption--the engine of growth in Greece.
High growth and low interest rates had masked major fiscal and structural weaknesses that were aggravated by the global financial crisis and ensuing recession. As a result of a high 2009 fiscal deficit (revised upward by Eurostat to 15.4% of GDP from 13.6% of GDP), mounting entitlement costs, and deteriorating competitiveness resulting from higher than Eurozone-average inflation and rigidities in product and labor markets, markets in early 2010 began to question the sustainability of Greece’s public debt (2009 debt revised upward by Eurostat from 115.1% of GDP to 126.8% of GDP). Ever-increasing market doubts and pressures resulted in higher and higher borrowing costs throughout the winter and spring of 2010. Eventually, unsustainable borrowing costs caused Greece to lose market access, forcing Prime Minister Papandreou on April 23, 2010 to request an emergency assistance program from his Euro-area partners and the International Monetary Fund (IMF). In early May, the Greek parliament, Euro-area leaders, and the IMF Executive Board approved a 3-year €110 billion (about $145 billion) adjustment program to be monitored jointly by the European Commission, the European Central Bank, and the IMF. Under the program, Greece has promised to undertake major fiscal consolidation and to implement substantial structural reforms in order to place its debt on a more sustainable path and improve its competitiveness so that the economy can re-enter a positive growth trajectory. Specifically, the 3-year reform program includes measures to cut government spending, reduce the size of the public sector, tackle tax evasion, reform the health care and pension systems, and liberalize the labor and product markets.
Since that time, the Greek Government has legislated a number of these important reforms and reduced the deficit from 15.4% of GDP in 2009 to 10.6% of GDP in 2010. Slow implementation of the reforms, along with a deeper than projected recession, led Eurozone leaders to a new agreement on October 26-27, 2011. It includes a “voluntary” nominal loss of 50% on private holdings of Greek Government debt (known as Private Sector Involvement, PSI) worth €100 billion (approx. $133 billion), an EU contribution to PSI of €30 billion (approx. $40 billion), and an additional €100 billion (approx. $133 billion) in official loans through 2014.
The global crisis and the consequent recession caused an increase in unemployment to12.5% in 2010 and to 20.7% as of March 2012. Foreign direct investment (FDI) inflows to Greece have dropped, and efforts to revive them have been only partially successful as a result of declining competitiveness and a high level of red tape and bureaucracy. At the same time, Greek investment in Southeast Europe and Turkey has increased, leading to a net FDI outflow in some years.
Greece has a predominately service economy, which (including tourism) accounts for almost 79% of GDP. In 2010, the Greek merchant navy was the largest in the world at 15.96% of the world's total capacity. Other important sectors include food processing, tobacco, textiles, chemicals (including refineries), pharmaceuticals, cement, glass, telecommunication and transport equipment. Agricultural output has steadily decreased in importance over the last decade, accounting now for only 3.3% of total GDP. The EU is Greece’s major trading partner, with more than half of all Greek two-way trade being intra-EU. Greece runs a perennial merchandise trade deficit, and 2010 imports totaled $64.5 billion against exports of $22 billion. Tourism and shipping receipts together with EU transfers make up for much of this deficit.
European Union (EU) Membership
Greece has been a major net beneficiary of the EU budget; in 2009, EU transfers accounted for 2.35% of GDP. From 1994 to 1999, about $20 billion in EU structural funds and Greek national financing were spent on projects to modernize and develop Greece's transportation network in time for the Olympics in 2004. The centerpiece was the construction of the new international airport near Athens, which opened in March 2001 soon after the launch of the new Athens subway system.
EU transfers to Greece continue, with approximately $24 billion in structural funds for the period 2000-2006. The same level of EU funding, $24 billion, has been allocated for Greece for 2007-2013. These funds contribute significantly to Greece's current accounts balance and further reduce the state budget deficit. EU funds will continue to finance major public works and economic development projects, upgrade competitiveness and human resources, improve living conditions, and address disparities between poorer and more developed regions of the country. The EU plans to phase them out in 2013.
U.S.-Greece Trade
In 2010 the U.S. trade surplus with Greece was $880.2 million. There are no significant non-tariff barriers to American exports. U.S. exports to Greece were $1.6 billion, accounting for 2.5% of Greece's total imports in 2010. The top U.S. exports remain defense articles, although American business activity is expected to grow in the tourism development, medical, construction, food processing, and packaging and franchising sectors. U.S. companies are involved in Greece's ongoing privatization efforts. Further deregulation of Greece's energy sector and the country's central location as a transportation hub for Europe may offer additional opportunities in electricity, gas, refinery, and related sectors.
FOREIGN RELATIONS
Greece's foreign policy is generally aligned with that of its EU partners. Greece maintains full diplomatic, political, and economic relations with its Southeast European neighbors, except with the Republic of Macedonia (see below), and has played an important role as a leader of the region's Euro-Atlantic integration process. It provides peacekeeping and training contingents for Bosnia, Kosovo, and Afghanistan. Prominent issues in Greek foreign policy include Balkan integration and the name dispute with Macedonia, Greek-Turkish differences in the Aegean, the reunification of Cyprus, illegal migration, Turkish accession to the EU, regional energy development, Middle East relations, including strengthening ties to Israel, international peacekeeping operations, and Greek-American relations.
Energy
Greece enjoys a geostrategic position for the transit of oil and gas from Caspian Basin and western Asia producers to the consumers of that energy in Europe. Greece is seeking to become an energy hub for these resources and has undertaken policies to that end. Taking advantage of its geographic position, Greece has identified four regional energy projects as top priorities. Greece, along with Turkey and Italy, is a partner of the ITGI (Interconnector Turkey-Greece-Italy) gas pipeline that, if fully realized, would transport up to 11 billion cubic meters of mostly Azerbaijani (and possibly other) gas to southern Europe by 2012. The ITGI currently transmits about 0.75 billion cubic meters of gas from Turkey to Greece; however, Turkey and Azerbaijan need to conclude a gas transit and pricing agreement before the full potential of the project can be realized. An ancillary project to ITGI is the IGB (Interconnector Greece- Bulgaria), which is a gas pipeline spur, linking ITGI with the Bulgarian market.
Greece also has been discussing for many years the development of an oil pipeline to transport Russian oil between the Bulgarian Black Sea port of Burgas and the Greek port of Alexandroupolis on the Aegean coast. The purpose of the project is to reduce oil tanker ship traffic from the Black Sea through the crowded Bosporus strait, reducing the risk of environmental degradation and speeding the flow of oil to Western markets. The Burgas-Alexandroupolis pipeline currently is being held up by an incomplete environmental impact assessment for the Burgas terminal area. In 2007, Greece signed an agreement with Russia to participate in the proposed Russian South Stream natural gas pipeline, which would run along the Black Sea seabed and emerge in Bulgaria, eventually passing through Greece. This megaproject remains in the conceptual stages with challenges associated with the technical feasibility of transiting the Black Sea, and questions regarding the available sources and quantities of gas to fill the pipeline.
In August 2011, the Ministry of Environment, Energy, and Climate Change, through the recently established agency “Greek Regulatory Corporation for Hydrocarbons SA”, conducted an international public invitation for participation in non-exclusive seismic surveys for hydrocarbon.
Peacekeeping Operations
Greece has supported NATO’s presence in Afghanistan since NATO took command of the International Security Assistance Force (ISAF) in 2003. Greece has contributed approximately 75 trainers to the NATO Training Mission - Afghanistan, maintains a small headquarters element with ISAF in Afghanistan, and completed a 6-month command rotation of Kabul airport in October 2010. Greece provided over €72 million (about $96 million) in development and humanitarian aid to Afghanistan between 2002 and 2009.
Greece’s special political and economic relationships with countries in the Balkans play an important role in reinforcing democratic development there. The country has made positive contributions to Balkans reconciliation through its involvement in the NATO-led Kosovo Force (KFOR), NATO’s long-running (and now concluded) SFOR mission in Bosnia, and SFOR’s follow-on mission, the EU’s operation “Althea.” There are presently 44 staff members in Althea and over 200 Greek troops in Kosovo.
Greece has been an active participant in NATO’s Ocean Shield counter-piracy operation providing protection for World Food Program chartered and merchant vessels off the coast of Somalia, and routinely contributes to NATO maritime operations. Greece previously led, and it continues to participate in, the European Union’s “Atalanta” counter-piracy missions. The U.S. Navy’s naval support base at Souda Bay on the island of Crete provides operational and logistical support to European Command (EUCOM), Central Command (CENTCOM), the U.S. Fifth and Sixth fleets, and NATO forces engaged in missions in Iraq, Afghanistan, the Balkans, and the Middle East. Souda played an important support role for NATO forces during Operation Unified Protector in Libya in 2011.
U.S.-GREECE RELATIONS
Greece is an important partner of the United States on many policy priorities. As a leader in the region, Greece has also been an ally to the U.S. in promoting Balkan stability and economic development, supporting Turkey’s bid for accession to the European Union, and supporting the diversification of Europe’s energy supplies. Greece’s geostrategic position also makes it an important ally in engagement and dialogue with the Muslim world. As an entry point into the Schengen visa area for migrants from the Middle East, North and Sub-Saharan Africa, and Southwest Asia, Greece is committed to the humanitarian treatment of migrants but also an improvement in conditions in countries of origin that would ease the pressures for migration.
An estimated three million Americans resident in the United States claim Greek descent. This large, well-organized community cultivates close political and cultural ties with Greece. There are approximately 90,000 to 100,000 American citizens resident in Greece. Greece has the seventh-largest population of U.S. Social Security beneficiaries in the world.
In 1953, the first defense cooperation agreement between Greece and the United States was signed, providing for the establishment and operation of American military installations on Greek territory. The United States closed three of its four main bases in the 1990s. The current mutual defense cooperation agreement provides for the continued operation by the United States of a naval support facility at the strategically located deep-water port and airfield at Souda Bay in Crete.
Greece was admitted to the Visa Waiver Program in 2010.
