Background

Finance & Economy

The Greek economy is small, but has good growth potential. Greece is becoming a strong economic link between the east and west. With the succession of Bulgaria and Romania into the European Union, major Greek companies have begun to expand into these markets by opening branches of Greek banks and manufacturing facilities.

Since 2004, Greece has been attracting more foreign investment capital. This is mainly due to the conservative Government’s promotion of privatization and the investment opportunities and infrastructure created by the Athens Olympic Games in the same year. According to the Ministry of Economy and Finance (Ipourgeio Eikonomias & Eikonomikon), foreign investment in 2006 was nine times higher than 2005. It totaled €4.3 billion, accounting for 2% of GDP. Total investment climbed to 25.7% of GDP, making it the highest rate among other members of the European Union. In 2009, The Ministry of Economy and Finance projected that investment was likely to increase by 10%. However, in April 2010 the rating agency Standard & Poor downgraded Greece’s debt to ‘junk’ status. This rating implies that Greece is a particularly risky country to invest.

The cost of living in the metropolitan areas of Greece is relatively high, and Greece is ranked 25th most expensive country in the world. As a result, only 1.19% of gross disposable income is put into savings. Wages in Greece are also lower than in other EU countries, especially compared to the cost of living. The monthly minimum wage in 2008 was €668 (net), and the average wage earned per month was between €500 and €1000 (net).

The Ministry of Economy and Finance is responsible for setting financial policy. The General Accounting Office is responsible for the management of the state budget.