Country Spotlight: GREECE

 

 

 

 

 

QUICK FACTS

Full name: Hellenic Republic
Capital city: Athens
Population: 10,741,165 (1 January 2018)
GDP in Current prices: USD $218.06 billion (2018)
GDP real growth: 2.0% (2018)
Area: 131,957 km²
Government: Unitary parliamentary republic
President: Prokopis Pavlopoulos
Prime Minister: Kyriakos Mitsotakis
Currency: Euro (€) (EUR)
HDI: 31st (2018)
Ease of doing business index: 72nd (2018/19)
Time Zone: GMT +2
Dialling code: 30

 

Greece is one of the oldest countries in Europe and is generally considered to be the cradle of Western civilisation. Situated in Southeast Europe on the southern tip of the Balkan Peninsula, the country shares land borders with Albania to the northwest, North Macedonia and Bulgaria to the north, and Turkey to the northeast. The rest of the mainland is washed by the Aegean Sea to the east, the Mediterranean and the Cretan Sea to the south, and the Ionian Sea to the west.

 

Geography and administrative regions

Greece is basically a peninsular country with an archipelago of several thousand islands and has three main geographical constituents:

  • The northern mainland, which is mostly mountainous, has a total land area of 96,733 km² and contains eight of the 13 regions that Greece was divided into with effect from 1 January 2011 following a major administrative reform. These include Attica, the capital of which is also the national capital of Athens, one of the oldest cities in the world with a recorded history of 3,500 years.
  • The Peloponnese peninsula to the south is separated from the mainland by the Corinth Canal and is an individual region with a land area of 15,511 km². The canal stretches for 6.3 kilometres across the Isthmus of Corinth linking the Corinthian Gulf with the Saronic Gulf. Several rulers including the Roman emperors Caligula and Nero had commissioned studies into digging a canal, but it wasn’t until 1881 that work actually commenced and it formally opened in July 1893. The canal has a water depth of 8 metres and a width of between 21-25 metres and is mainly used now by tourist ships.
  • The rest of Greece is made up of around 6,000 islands and islets that between them make up around 19.805 km² (15% of Greece’s total land area) and are divided into the remaining four administrative regions:
    • Ionian Islands, with Corfu as its capital
    • North Aegean, including the islands of Lesbos and Samos
    • South Aegean, including the Cyclades and Dodecanese island groups
    • Crete, which includes the island of Crete, the largest and most populous of the Greek islands, and the island of Gavdos, which is the southernmost point, not just of Greece, but of the whole of Europe.

According to the Hellenic Statistical Authority, 227 islands are inhabited and account for 13% of the country’s total population of 10.74 million.

 

Classical History

There were several advanced civilisations evident in Greece during the 3rd and 4th millennia BC before the rise of the Mycenaeans on the Greek mainland around 1900 BC. By the end of the Bronze Age, following a period of considerable regional upheaval, Greece was a conglomerate of city states which also spread into Southern Italy and Asia Minor. In 776 BC, the first Olympic Games were held at Olympia on the Peloponnese peninsula and it was around this time that Homer composed his classical works the Iliad and the Odyssey as part of a great cultural boom.

In 508 BC, the world’s first democratic system of government was instigated in Athens. But several city states in Macedonia and Asia Minor were falling victim to raids by the Persian Empire and in 481 BC, the Hellenic League was formed to repel the Persians. Led by Sparta and Athens, the Greek victories heralded a period of stability referred to as The Golden Age of Athens, during which time many of the foundations of western civilisation were established. Philip II of Macedon united most of the Greek mainland before his assassination in 336 BC, and his son Alexander the Great expanded the empire into northeast Africa and Asia, helping to spread Greek culture, language and technology.

Greece later fell under Roman rule from 146 BC and was absorbed into the Roman Empire by the emperor Augustus in 27 BC. However, the Romans admired and protected Hellenistic culture and Greece continued to flourish for the most part into the middle ages.

During the 14th and 15th centuries, much of the Greek peninsula fell into the hands of the Turkish Ottomans, prompting waves of Byzantine Greek scholars to flee to the west, taking with them (and thereby preserving) great hoards of Classical Greek and Latin literature. By 1460, the whole of the Greek mainland had been conquered by the Ottomans with most of the island groups falling during the 16th century. Only the Ionian islands escaped long-term Ottoman rule, as the Republic of Venice retained control until the islands were captured by the French Republic in 1797 and later ceded to the UK in 1809.

The early nineteenth century saw a rise in what was termed the Modern Greek Enlightenment, as dispersed Greek merchants gained wealth through commerce and shipping. A series of separate revolts against the Ottomans and their Egyptian allies brought brutal response on some islands, which in turn led to the French, Russian and British sending fleets to aid the Greeks in what later became known as the Greek War of Independence (1821-1829).

Following a decisive victory at the Battle of Navarino and subsequent negotiations, Greece secured its independence and the new state was formally recognised by the major powers in an agreement signed on 3 February 1830. Greek Independence Day is celebrated as a national holiday on every 25th of March, this being the traditional anniversary date of the declaration of independence in 1821.

 

Modern Greece

Over the next few decades, Greece became embroiled in several more conflicts with the Ottomans, including the Balkan Wars of 1912-13, which saw Greece consolidate and expand its territory into Macedonia and Thrace. The onset of World War II saw much of Greece occupied by Nazi forces during 1941-1944 while its government was in exile, during which time the Greek resistance was regarded as one of the bravest and most effective resistance movements in Europe, despite the brutal reprisals meted out by the occupation forces. However, Greece’s liberation by the Allied troops in October 1944 did not alleviate the social hardships for long, as the country descended into a violent civil war between the government’s national army (backed by the USA and the UK) and the communist forces of the DSE (backed principally by Yugoslavia) lasting until October 1949.

With increased aid from the USA, the Greek government won through and the country joined NATO in 1952 to strengthen the Western bloc during the early days of the Cold War. But political tensions during the 1960s culminated in another coup d’etat on 21 April 1967.

For the next seven years, the country was ruled by far-right military juntas in what was commonly referred to as the ‘Regime of the Colonels’. During this period, civil liberties were brutally suppressed and the repercussions of the regime continued to reverberate for many years afterwards, with the leading junta members later arrested and sentenced to death (later commuted to life imprisonment) for high treason.

Parliamentary democracy was restored in November 1974 and a referendum held the following month voted against the restoration of the monarchy. This created what is generally referred to as the Third Hellenic Republic and a new democratic constitution was drawn up and adopted on 11 June 1975. In 1980, Greece rejoined NATO, having previously suspended its membership in 1974 in protest at the Turkish invasion of Cyprus. On 1 January 1981, Greece became the tenth country to join the European Economic Community, heralding a sustained period of economic growth. Greece joined the Eurozone in 2001, having successfully satisfied the criteria for acceptance, and in August 2004, Athens successfully hosted the summer Olympic Games, using the motto ‘Welcome Home’.

 

Politics

Officially, although starting as a republic, Greece was a constitutional monarchy from 1844 and a crowned republic from 1864 until 1924. The monarchy was restored in 1935 but finally abolished in 1974. The 1975 Greek constitution describes Greece as a ‘presidential parliamentary republic’. The head of state is the President, who is elected by the parliament for a five-year term with a maximum of two terms.

The Greek parliament is a unicameral legislature which is elected for a maximum four-year term using a complicated form of proportional representation to determine who fills the 300 seats. All voters are automatically registered and voting is mandatory. In 2016, the voting age was reduced from 18 to 17, taking effect from the 2019 elections. The Prime Minister is formally appointed by the President and is usually the leader of whichever political party polls the most votes and is able to form a majority or coalition government. The parliament is located at the Old Royal Palace which overlooks Syntagma Square in Athens.

The latest parliamentary election was held on 7 July 2019 and was the sixth legislative election in less than ten years. The previous Prime Minister Alexis Tsipras had taken the left-wing political party Syriza to power in the January 2015 election at the height of the Greek bail-out crisis (see below). But following defeats in the 2019 local elections and European elections, Tsipras called a snap election and ultimately paid the price for under-delivering on his campaign promises, losing 59 seats as the New Democracy party returned to power with an outright majority of 158 seats.

 

Economy and trade

Greece has an advanced high-income developed economy with a high standard of living. The country went through a period of rapid economic growth after joining the EU, averaging over 2.5% real year-on-year growth between 1984 and 2007, by which time Greece had climbed into the World Bank’s list of top 30 largest economies by nominal GDP. However, the global financial crisis of 2007-2009 affected Greece more severely than most countries as the country’s public debt rose to unsustainable levels. In 2010, the other Eurozone members together with the IMF agreed an initial €110 billion euros rescue package, followed by a second bail-out in 2012, but on condition that the Greek government implemented strict austerity measures.

Unfortunately, the crisis was to get worse before it got better; the country suffered a 25% drop in its GDP between 2009 and 2012, for which, in June 2013, the IMF acknowledged and apologised to Greece for mistakes in underestimating the impact of the austerity conditions. Unemployment rose from 7.8% in 2008 to 27.5% in 2013, with youth (age 15-24) unemployment rising from 21.7% to 58.2% over the same period, leading to social unrest and targeted strikes by public service workers. But in 2014, after six consecutive years of recession and restructuring of the national debt, the economy grew by 0.7% and the third bailout was finally agreed after several months of negotiation in July 2015, payable in tranches until August 2018.

Slight contractions of -0.4% and -0.2% followed in 2015 and 2016 respectively, but 2017 saw a real growth rate of 1.5% and the latest figures for 2018 show an improved real growth of 1.9%. Unemployment has also improved, down to 19.6% across 2018 with youth unemployment hovering just under 40%, although Greece still has one of the highest levels of unemployment in Europe.

The economy, which now ranks 50th in terms of nominal GDP, is largely based on services, tourism and shipping. The agricultural sector contributes about 4% to GDP, industry 16% and services 80%. Exports rose by 15.7% in 2018 to achieve a record high of €33.4 billion (including oil products), while the value of imports rose by 9.5% to €55.1 billion. This gave a trade deficit for 2018 of around €21.7 billion, which is a significant improvement on the €44.3 billion negative balance of trade in 2008. The Panhellenic Exporters’ Association are expecting 2019 to be another record year for exports which, with sustained investment, they hope will help to boost local jobs.

 

Travel and tourism

2018 was also a very good year for the tourism industry, which has been a key driver in the recovery of the Greek economy. Tourism has always been important to Greece, with its cultural heritage, extensive beaches and Mediterranean climate making Greece one of the most visited countries not just in Europe, but globally. Greece has no fewer than 18 UNESCO World Heritage Sites and its island Santorini – a favourite destination for cruise passengers as well as direct holiday-makers – was voted the world’s best island in 2011 by ‘Travel + Leisure’ and was the most visited island in Greece last year with close to two million visitors.

The total number of international tourists to Greece reached 30.12 million during 2018, 10.8% higher than 2017’s total of 27.19 million and more than double the number of arrivals in 2009. The Bank of Greece reported that the revenues generated by the tourists amounted to €16.11 billion ($18.30 billion). 71% of the tourists were nationals from other EU member states, with 4.4 million coming from Germany, followed by 2.9m from the UK and 1.5m from France. The number of international air arrivals grew by 12.9% to a record 20.7 million, with Athens International Airport – the largest of 15 international airports in Greece – seeing a 19.4% year-on-year increase in international arrivals to 5.7 million.

Figures from the World Travel & Tourism Council (WTTC) show that the total Travel and Tourism sector in Greece grew by 6.9% in 2018 – well over three times the national economy growth rate – and contributed the equivalent of $44.6 billion to GDP. This represents a record 20.6% of Greek GDP, compared with a global average of 10.4%.

 

Residency and Citizenship by Investment

In July 2013, the Greek government introduced its Permanent Residency Programme as a means to encourage foreign direct investment in Greece. By June 2019, over 4,500 main applications had been approved in total, with over 60% coming from China and 9% from Russia.

 

Requirements

A minimum of just €250,000 must be invested in real estate, making this one of the most accessible investment immigration policies in Europe. Note that this excludes legal fees and taxes; new property purchases are subject to 24% VAT. Any number of properties may be combined to make up the minimum required investment and joint buyers may also combine their investments into one higher-priced property. Applicants must have a clean criminal record and have medical insurance covering their stay in Greece. Residency can be obtained within 60 days and is valid for five years, which can be renewed every five years thereafter provided the applicant still owns the property.

 

Advantages of the Greece Golden Visa Program include:

  • No requirement to actually reside in Greece
  • Residence permits can be acquired within 30–60 days
  • Visa-free travel within Europe’s Schengen Area
  • Unlimited expiry date of residence permit, subject to continued property ownership
  • Opportunity to rent out the investment property
  • Residence applies to the whole family (married spouse, children under 21 years old, and parents of the main applicant and spouse)
  • Permit holders may hold shares and receive income from the dividends of a company registered in Greece; however, they are not allowed to be employed in Greece.

 

Citizenship and a Greek passport may subsequently be applied for, but only after seven years of actually living in Greece, whereas to qualify for a residency card does not require the holder to live in Greece.

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