Economic Background – Greece

Greece has a mixed capitalistic thrift with a large public welkin that accounts about half of GDP. Besides, Greece is a study beneficiary of European Union aid, which make up to about 3. 3% of annual GDP. In addition, Greece is an agricultural country and one of the poorest countries of the European Union with the second to lowest average income, after Portugal. In January 2002, Greece adopted the euro as its currency.The adoption provided Greece, formerly a spunky inflation risk country downstairs drachma, with access to competitive loan rank and also to low rates of the Eurobond marketplace which lead to a dramatic join on in consumer spending and gave a momentous boost to economic product. Between 2003 and 2007, Greece thriftiness grew by nearly 4. 0% per year. The breeding for the Athens Olympic Games during 2004 gave an impulse to the Greece economy. However, the monetary crisis had slowed down the Greeces economic growth to 2.0 % in 2008.As a yield of the world fi nancial crisis and its impact on access to credit, world trade and interior(prenominal) consumption, the economy went into recession in 2009 and promise by 2. 0%. In new-fangled 2009, eroding public finances, misreported statistics, and inadequate devour on reforms prompted major credit rating agencies to downgrade Greeces foreign debt rating, which has led to increased financial instability and a debt crisis.Greek political science has approved a three-year reform syllabus that includes cutting government spending, reducing the size of public sector, tackling valuate evasion, reforming the health care and pension systems, and up competitiveness through structural reforms to the undertaking and product market under the blood-and-guts pressure by the EU and international lenders.The Greek Government projects that its reform program will achieve a decrement of Greeces deficit by 4% of GDP in 2010 and allow Greece to fall the deficit to below 3% by 2012. Greece requested ac tivation of a spliff European Union-International Monetary Fund shop at mechanism designed to assist Greece in financing its public debt in April 2010.