The Greek economy is not doing very well. Many would consider this to be a dramatic understatement. Some of the factors that support this statement are the following:
1. New Investments are almost non-existent
2. Business failures far outnumber new business start-ups.
3. Unemployment is running at approximately 10%.
4. Inflation has all but eliminated savings.
5.Consumerism has driven almost all Greeks into serious debt.
Contrary to the hopes of most Greeks, the Olympic games did not bringthe expected returnsin the form of increased foreign investment and tourism to Greece. Much of this can be attributed tothe poor timing involved since we are in the middle of a global economic slow-down and international terrorism has dramatically decreased tourism to almost all tourist destinations. Much of the problems can also be attributed to the previous socialist "PASOK" government and its economic policies. For most of 1999, the Greek stock market experienced"fairy-tale" like prosperity when worthless stocks went from prices of $0.10 per share to as much as $100.00 per share. Instead of intervening to protect the investment public from this obvious greed fueled stock frenzy, government officials actually praised the Greek stock market for reflecting the true nature of the Greek economy, that is that the Greek StockMarket was a healthy and thriving segment of the healthy and thriving Greek economy.
Then, one day in December of 1999, the Greek stock market crashed and hundreds of thousands of unsuspecting Greeks lost their life savings, their homes, their businesses and in many cases went into over- whelming debt. Some actually even committed suicide. Obviously, a handful of people made millions while hundreds of thousands of other people lost everything they had.
At the same time and continuing through to early 2004, when the Socialist party lost power to the Conservative "New Democracy" party, the socialist government implemented "creative accounting" when reporting economic indicators to the European Union Economic Commission. They literally "fudged" the numbers in order to make it appear that Greece's economy was robust, thriving and growing at a healthy above EU average rate. They did this for the purpose of gaining full economic and monetary union with the remaining 14 European Union countries. When the conservative party came to power in March of 2004, it didn't take long for their Minister of Economy to recognize the magnitude of the scam and the government decided to come clean with the EU and to admit to the "numbers tampering". The impact of this scandal has been devastating to the Greek economy.
At this point, the current government has not been able to do much to turn the tide. They have made some luke warm efforts to kick-start the economy, but the general consensus is that their attempts are too little and too late. They need to take drastic measures that will require significant sacrifices, but most people believe that they lack the necessary determination and courage to do what needs to be done. I believe that things will get worse before they get any better.Regards from sunny Athens,
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