Wednesday, October 24, 2012

Greece

Nat and I decided on a weekend trip to Athens in a few weeks.  She's never been there before and it's been 20 years since I was in Athens so this should be a good little adventure.  This will also be country #33 that I've visited since I moved here in July 2009.  My last assignment in the military was in Heraklion, Crete, which seems like a lifetime ago.  I'm still planning a return trip to Crete in the future.  It should be interesting to see how things have changed in Greece since I left.

Officially the Hellenic Republic (Ελληνική Δημοκρατία), Greece (Ελλάδα) is in southeast Europe.  Greece borders Albania, Macedonia, Bulgaria and Turkey.  It lies on the Aegean Sea, the Ionian Sea and the Mediterranean Sea.  The country has around 1,400 islands but only 227 of them are inhabited.  Crete is the largest island.  The entire country is a bit smaller than Alabama and has a population around 11 million.  Athens is the capital and its largest city.

The first advanced civilizations in Europe began here around 3200 BC.  Ancient Greece was the cradle of Western civilization.  It gave us democracy, western philosophy, and the Olympic Games.  There is a lot of history to explore here.  Greece is home to 17 UNESCO World Heritage Sites - the 7th most in Europe (13th in the world).

Following the Greek War of Independence, from the Ottoman Empire, Greece was established in 1830.  During WWII, Greece was invaded by Italy in 1940 and then occupied by Nazi Germany from 1941 to 1944.  Then there was a civil war between nationalists and communists that lasted until 1949.  Many Greeks ended up in Czechoslovakia but more on that one later.

Greece joined NATO in 1952.  A military dictatorship took control of the country in 1967 and it wasn't until 1974 that democratic elections took place which created a parliamentary republic.  In 1981, Greece joined what later became the EU and adopted the euro in 2001.  Greece is a member of the Schengen area but may be kicked out.

Greece has several issues to deal with.  Traditionally, these have been with neighboring countries.  There is a big rivalry between Greeks and Turks.  There are always territorial disputes in the Aegean Sea between the two countries.  There is a section of Greece called Macedonia so it rejects the Republic of Macedonia from using the name.  The migration of unemployed people from Albania has helped to put a strain on the Greek government.  And these are just some of the traditional issues the country deals with.  The more recent problems are the ones that require the most attention.

Greece's economy is a wreck.  The country falsified records in order to join the Eurozone when in fact it never met the basic requirements for membership.  Greece was spending more than it was earning before it joined the euro and public spending went crazy after it joined.  To make matters worse, high levels of tax evasion have caused the budget deficit to spiral out of control.  When the global financial crisis hit, Greece was no longer able to repay its debt and the country was forced to ask for massive loans.

In 2010, the EU and the International Monetary fund gave €110 billion ($140 billion) and in 2012 another €130 billion bailout package was approved.  Most of the country's private creditors agreed to write off over half of their Greek debt and to provide lower interest rates for existing loans.  Currently Greece owes $38B to French banks, $8.2 to UK banks, $5.5 to German banks and $3.2B to US banks.

However, in exchange for all of this assistance, Greece has had to undertake major austerity measures to cut spending, raise taxes and undergo pension and labor market reforms.  Without the ability to devalue its currency, Greece has a long hard road ahead.  Over 25% of the country is currently unemployed.  For young people, the rate is more than 54%.  This prevents the country from collecting revenue in order to pay off its debt which forces further public spending cuts.  This is also causing a "brain drain" as educated Greeks are leaving the country in order to find jobs overseas.  What a mess!  At some point, there will have to be a "GrExit" from the Eurozone which will set a dangerous precedent with regards to the troubled economies in Spain, Italy, Portugal and Ireland.

Here's a video from 2011 I found on YouTube that gives more information.

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