Economic Performance Since the Civil War

At $US70.2 billion, Greece’s official GDP in 1991, at current prices and current exchange rates, ranked ninth in the European Union (EU), above Portugal’s ($US68.6 billion) and Ireland’s ($US43.4 billion), and below Denmark’s ($US 130.3 billion).1 In terms of GDP per capita, though, Greece, at $US6840 was last in the EU (Portugal: $US6991; Ireland: $US 12 324).2 The comparison with Portugal is all the more remarkable, since as recently as 1986 her GDP per capita, at $US2984, was quite below Greece’s, which was $US3987. The change in respective rank reflects positively upon Portugal’s efforts, but also the fact that after a period of high initial growth, as Greece was rebuilding herself after the wars of the 1940s,3 the country’s economic performance has deteriorated markedly since the mid-1970s. The pattern of Greek real GDP growth rates can make more sense if it is associated with appropriate periods of Greek post-war political history. Seven such periods have been identified, and are presented in Table 2.1. The decline has been greater than what would have been expected merely as a result of the two oil shocks (1973 and 1979–80), and of the drop in growth rates across the OECD (see next section). Indeed, if the problem had simply been finding ways to deal with these two factors, then applying appropriate economic policies might have sufficed.