The Repercussions of the Financial Crisis (2008) on the Foreign Trade Between Greece and the Balkan Countries (BCs)

In this paper we will examine the repercussions of the financial crisis on the foreign trade between Greece and the BCs. Based on the literature and findings related to the financial crisis and international trade, we examine the quantitative data on the foreign trade between Greece and the BCs during the 2007–2010 period (Greek exports and imports to and from the BCs, the balance of trade and the trade volume). When investigating the changes of the foreign trade between Greece and the BCs during the financial crisis period, a correlation is made between the annual change of the BCs GDP and the change in Greek exports and imports to and from the BCs. Based on the course of Greek exports over the last three decades (1980–2007), it appears that they are intensely influenced during periods of global recession. With 2008 being the financial crisis reference year, Greek trade imports and exports to and from the BCs marked a decrease in 2009. Tracking Greek exports from 2007 to 2010, it can be seen that they present a greater reduction towards the BCs compared to the EU and the rest of the world. From 2007 until 2010 there is a continuous trend in the reduction of Greek imports from the EU and the world, whilst imports from the BCs present a slight increase. With most of the BCs, Greece’s balance of trade is in surplus throughout the period in question, although a reduction in the surplus is noted in 2008. Its geographical significance during the financial crisis period has also negative repercussions for Greece’s neighbour countries and the volume of foreign trade transactions. The Greek trade volume with most of the BCs is reduced to a lower level compared to the trade volume with the EU and the world and this seems to be due to its geographical position and to a lesser extent to Greece’s trade completion with the BCs compared to the EU. Although the terms of trade between Greece and the BCs have generally deteriorated, they remained favourable for Greece, while the terms of trade between Greece and the EU and the world as a whole are unfavourable for Greece and have further deteriorated. In 2009, a GDP reduction is marked in almost all the BCs as a consequence of the 2008 financial crisis. Correlating the changes of the BCs’s GDP and Greece’s imports and exports to and from the BCs, one is able to ascertain that 2009, which coincides with the greatest recession of the BCs, also presents the greatest reduction in both Greek imports and exports. Furthermore, it is ascertained that the countries that went through the greatest recession during 2009 also experienced the greatest reduction in Greek imports and exports. Finally, it is concluded that the extent of the recession of the BCs is directly related to the progress of the Greek exports towards these countries.