Evaluation Of Greece Position In 2015 Report Sample

Type of paper: Report

Topic: Athens, Greece, Business, Economics, Europe, Commerce, Politics, Trade

Pages: 9

Words: 2475

Published: 2021/02/04

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Executive Summary

This study evaluated the Greece position in the world in 2015. Greece has an important place in world civilization and history. Western civilization cannot be properly discussed without making reference to the ancient Greece. The famous European country has undergone a lot of economic and political unrest, and it all began with the 1973-74 oil shock. This European country has struggled to recover from this quagmire over the years but despite its struggles, very little success has been recorded. The study of Greece is categorized into various sections and deep-dives into discussion related to Greece and member European countries along with the rest of the world. Various important issues with respect to the present day Greece are evaluated. These include the political economy, regional economic integration, international trade, foreign direct investment, globalization and the culture and ethics of the people. The critical evaluation and analysis of Greece position in the world would be of great help to businesses and countries attempting to partner with Greece. As a business consultant, it also suggests ways in which Greece can mitigate and solve its teeming current problem accumulated over the years.

Greece Position in 2015

Introduction
The Greece history is an interesting one as much of the western civilization started from Greece. The history of Greece dates as back as 2200BC, and it can also be classified into different ages or dispensations. These include the Minoan, the Mycenaean, the Greek Dark Age and the Archaic age. In addition, it observed the classical age, the Hellenistic Greece, the Roman Greece and the Byzantine Greece. (Greece, 2009). The modern Greece is located in Southern Europe, and it occupies a land expense of 131,957 sq. km. Greece borders are adjacent with Albania, the Former Yugoslav Republic of Macedonia, Turkey, and Bulgaria. Officially, Greece is known as the Hellenic Republic, and its total population as of 2011 is over 10.7 million (Panezi, 2006). The famous European country is made up of lots of islands that occupy up to one-fifth of the country’s land area. Greece practices parliamentary republic system of government and has a unicameral parliamentary system (Kovras, 2010). During the Ottoman Empire in 1830, Greece obtained its independence. It joined NATO in 1952, the EU in 1981 and adopted Euro as a currency in 2001 (Greece, 2009; Australian Government Department of Foreign Affairs and Trade, n.d). This report delineates critical evaluation of Greece position in 2015 with a viewpoint of the business consultant of the new government.

Greece’s Political Economy

The political economy of Greece is important to evaluate its position in 2015. Political economy is essentially a discipline that makes a link of politics and economics (Söderbaum, 2013). Irrespective of the different views of political scientists and economists, political economy tries to bring both sides of their views together. What need to be done with the current position of Greece in the world today? (Pagoulatos, 2003). The political economy of Greece, today tries to explain its post-war success, contemporary financial globalization and so forth. In other words, the political economy of Greece attempts to define the reason for its place in the world today. Essentially, Greece’s political economy can best be understood by taking a look at the various stages that the nation has experienced for many years after the war. These include the early postwar period and the 1950s, the 1960s and the dictatorship period. It was flowed by the 1970s economic crisis that coincided with the democratic transition, the period of inflation in the 1980s, financial liberalization and then the post-liberalization. (Kovras, 2010; Pagoulatos, 2003).
On the economic side, the postwar Greece was characterized by both economic success and turmoil (Endoh, 1999). In the early 1960s, Greece enjoyed economic development, and impressive economic growth. The European country was only second to Japan in economic growth, but this was short-lived. The 1973-74 oil crises changed the entire story for Greece and resulted to the international economic crisis, high inflation, unemployment and so forth. Though the oil crisis affected lots of other countries, Greece recovered from it effectively as it dwindled inflation and economic downfall (Pagoulatos, 2003, Business Insider, 2015).
Greece also presented an interesting history of politics (Tielens, Aarle and Hove, 2014). In the 1950s-60s, the country was ruled by the right-wing and then the centrist liberals. It then went through military dictatorship between 1967 and 1974. The third republic was consolidated by the rising of the government of socialist party (PASOK) under Andreas Papandreou in 1981 (Business Insider, 2015; Michaelides, Papageorgiou and Vouldis 2013; Pagoulatos, 2003). In the 1980s, Greece suffered from spending boom that was primarily driven by civil servant pension and wage increase. The system was poisoned with embezzlement and corruption. However, the signing of the Maastricht Treaty in February, 1992 which limits deficit and debt levels to make it be part of the Economic and Monetary Union helped Greece a lot in increasing its governmental revenue.

Regional Economic Integration

The regional economic integration is a system that has been designed in order to help countries focus on issues that concern their stage of development and also support trade between neighbors (New Charter University, 2015). As a result, regional economic integration can be broadly classified into four main types. It includes free trade areas, involving the removal of trade barriers by member countries. Secondly, the customs union which involves removal of trade barriers between member and non-member countries. At third, the common market which creates economically integrated markets among member countries, removing trade barriers, restrictions on movement of labor and capital between member countries. Lastly, the economic union which involves an agreement by countries to remove economic barriers among themselves.
Greece enjoys regional economic integration with member nations since it is an EU member (Kalampalikas and Pilavachi, 2010). The abolishing of trade barrier results to the geographical distribution of its foreign trade (Coutsoukis, 2004). Presently, in 2015, Greece’s major export and import countries are members of the EU including Germany, Italy and France. It also has intensive trade partnership with the Great Britain, Egypt, the United States and Cyprus. Its major import partners include Germany, Italy, France, Netherlands, Japan, the Great Britain and the United States of America.
However, the globalization does not favor Greece, and the best plan of action will be to forfeit its EU membership (Pal, 2011). Numerous factors are impacting on the economic performance of the EU cohesion countries namely; Greece, Spain, Portugal and Ireland (Barry, 2003). The factors that have impacted on their economic integration and performance includes labor-market performance, macroeconomic stability, and the efficacy of macroeconomic policy-making (Chang, Tsai, and Chang, 2011; Sangnier, 2013).

International Trade

One of the consequences of globalization, today is international trade (Arribas, Pérez, and Tortosa-Ausina, 2009; Lévy, 2007). None of the business consultants can ignore this undeniable fact to evaluate present international trade of Greece. Greece intensively participates in international trade with member EU countries as well as other countries of the world.
Apart from the Euro Zone, the United States is Greece's largest trade partner in the world as it maintains bilateral trade with Greece. During the postwar period, in the 1950s, Greece was involved in politico-economic tutelage by the United States (Pagoulatos, 2003). Initially, it was in the form of the Marshall Plan governance framework but in general it was in the form of a patron-client relationship. Greece was involved in trade with the United States, and it was also a member of international organizations including OECD and the IMF.
As per available statistics, Greece enhanced the export commodities include fruits, vegetables, olive oil, clothing, textiles, and so forth. Its primary imports include transport equipment, machinery, food, chemical products, petroleum and petroleum products. According to U.S Department of Commerce, (2015), Greece total export to the U.S amounted to $71.1 million and $75.1 million in January and February 2015 respectively. While its imports amounted to $96.0 million and $76.7 million respectively. This implies $24.9 million and $1.6 million deficits in January and February, 2015 respectively. Greece total import from the United States in 2014 was $1.0479 billion, and its total export was $772.6 billion which amounts to $275.2 million deficit. These statistics make Greece a business paradise and would facilitate to develop a more attractive image in the international trade market in 2015.
Another major international business partner is Australia. Australian Government Department of Foreign Affairs and Trade (n.d) mentioned that Greece is Australia’s 70th largest merchandise trading partner. In 2011-12, Australia exported $30 million worth of commodity to Greece while Greece exported $158 million worth of commodity from Australia. Australia imports a number of commodities from Greece ranging from medicaments and vegetables to aluminum and rubber articles. In the year 2011-12, Australia exported service worth $48 million to Greece whereas Greece exported $307 worth services to Australia. These services include education, business-related travels, and governmental services. This scenario of trade is in the interest of Greece providing room for further expansion in competitive trade environment and would make it the hub of trade in 2015.

Foreign and Local Investment

Foreign direct investment is another important aspect need to be reviewed to assess Greece position in 2015.Greece has gone through a number of crises that have heightened since 2010. The country experienced a gross capital inflow of 4 billion Euros in 2010 and a net capital inflow of more than 1.6 billion Euros (Bibliothiki, 2014). However, it is imperative to consider that Greece continues to dwindle in terms of openness to investment and economic freedom. As per 2015 Index of Economic Freedom, Greece economic freedom score is 54.0 which stand for the 130th freest economy in the world today.
Obviously, the country’s economic freedom score declined by 1.7 point of its score last year. This is attributed to the uncontrolled and enfeebled governmental expenditure. Further, Greece has suffered substantially from a decline in business freedom, fiscal freedom and labor freedom in the recent time. Remarkably, Greece is now below the world average and also the regional averages as it is ranked 40th out of the 43 European countries. Over the years since 2011, Greece has experienced a substantial decrease in economic freedom as its score has dropped 6.3 points since four years ago. It is amazing to observe for a business consultant that in few years ago, Greece was ranked as a moderate in terms of economic freedom, but today it is simply un-free.
At the same time, the Eurobonds is another issue that contributed in the economic crises of the Greece. Eurobonds were introduced to attract foreign and local direct investment. But due to weak financial policies, Greece unable to attain benefits. The system reforms can facilitate to overcome the budget deficit and make a sustainable position in 2015. However, this does not imply zero foreign direct investment in the country because irrespective of the difficulty, there is sufficient levels of foreign investment in Greece (Bibliothiki, 2014). The negative economic activities in Greece is well evidenced by the data from U.S Department of Commerce (2015). This shows a decline in export and increase in import between 2011 till date and this results to balance deficit.

Tax Culture and Issue

Tax culture and rules cannot be overlooked while evaluation business environment of a country. Greece is experiencing budget deficit that demand quantifying tax delusions to sustain his position in 2015. The country faces varying problems with its problematic rule of law, debt crisis, weakly enforced property rights, rising tax evasion and increasing corruption. The revenues collected are lower than other countries in Eurozone apart from the difference in value added tax. Greece needed to amend tax reforms to avoid further crises in 2015. Taxpayers are reluctant to pay due to reforms imposed by the relevant authorities. The system prevailing has many flaws that need amended frameworks to develop confidence and trust among the taxpayers. In fact, the complex system of Eurozone has expedited the issues for Greece.

Neoliberalism in Greece

Neoliberalism in Greece is supported by European Union that facilitated in funding for different projects. The reforms are implemented to keep compliance with the integrity of Neoliberalism (Duman, 2014). Contrarily, the financial system is still struggling due to futility in labor laws and reforms apart from the absence of legitimate policies in the market. Neoliberalism that defines class struggle would play a vital role in Greece economic position in 2015 and cannot be understated. In other words, the rigidity present in the labor market finds it difficulties to create a more business-friendly environment? (Kaplanoglou and Rapanos, 2015; Pappa, Sajedi and Vella, 2014).

Globalization

The future of a nation cannot be anticipated without taking into account the factor of globalization (Arribas et al., 2009). Globalization is termed as the integration of national markets through investment and international trade that enhances competitiveness, innovation, living standards and productivity around the globe (Fifth Third Bank, 2012). It also serves as an active force in reducing the rate of poverty.
However, Fifth Third Bank, (2012) argues that despite the obvious benefits of globalization, it poses difficult issues and challenges for many countries including European nations especially Greece. The major reason, why globalization does not favor Greece is that globalization tends to restrict a nation and force it to comply with the globalization policies. Thus, Greece is considered mostly unfree by the 2015 Index of Economic Freedom with a score of 130 whereas Germany; an EU member is considered mostly free with a score of 16. Greece has threatened long enough to jettison the Euro. It would be probably the best plan of action for remedy the country of its economic mess and quagmire. Greece can enjoy economic growth by relying on Euro that would benefit Greece much more

Greece Culture and Ethics

Greeks philosophy of business centers on ethics or subject of morality. Greece culture is characterized by the people's language, religion and way of life. Greeks are deeply religious people, practicing different religions (Greece, 2009). Greece culture emphasized good upbringing and made the Greek language a primary language in the world, and hence Greek formed the core of the western civilization (Kritsotakis, 2008). Greeks also value respects to elder and one another. It forms their cultural values and norms.
Moreover, the relationships are very important to do business with Greeks because they prefer to do business with trustworthy friends. In other words, nepotism is not considered negative in their society. The way of doing business is relaxed, and they prefer business meetings at dining that is an integral part of their culture, but they dislike informal dressing in such meeting. More so, they are hospitable and warm in relationships as well as used to exchange gifts at different occasions

Conclusion

Many pros and cons are apparent regarding Greece position in 2015. A historical study of Greece shows that the country, once experiencing exceptional economic growth, began to dwindle economically from the oil crisis of 1973-74. However, a thorough study of Greece position in 2015 further reveals that the country is going from bad to worse. Greece financial position is greatly dwindling as it accumulates more debts in the bid to alleviate its problems. According to Wenkel (2015), Greece is likely going into bankruptcy. It would probably have to exit from the Eurozone as the country's new government insists that it would not go for an extension of the bailout program. While Greece's international lenders insist that it should accept the extension. The government debt crisis has reached a crescendo. Greece is in an absolute state of tension as the report pointed out; there is presently no money supply in the country. The country can be said to be in a state of depression triggered by the great recession, but it only exposed the economic weakness of Greece.
As a business consultant, it is evident that it would take the Great Hellenic Republic a long time to recover from its financial tension and crisis. Greece's position in 2015 is obviously very poor, and this is not probably going to improve as fast as possible. This implies that Greece might not be the best business destination 2015 given its financial and economic conditions.

References

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