Greek economic miracle


Greek economic miracle

The term (modern) Greek economic miracle has been used to describe the impressive rate of economic and social development in Greece from the early 1950s to the mid-1970s. Between 1950 and 1973, the country had an average rate of economic growth of 7%, second in the World only to Japan’s during the same period. Growth rates were highest during the 1950s, often exceeding 10%, close to those of a modern "tiger economy" (industrial production grew annually by 10% as well, for several years, mostly in the 1960s). The term "miracle", though, is relatively little used, at least in Greece. The reason is connected with the Greek society itself: the post-war era until the mid-1970s was a time of deep political divisions that culminated in the Greek military junta of 1967-1974, and is difficult for Greeks to see any "positive" aspect of this quarter-century period. Moreover, growth (at least initially) widened the economic gap between rich and poor, only intensifying political divisions.

From 1941 to 1944, Axis occupation of Greece and the fierce fighting with Greek Resistance groups had unprecedented devastating effects on the infrastructure and the economy. Furthermore, after the end of the War Greece engaged on a particularly bitter Civil War until 1949. In 1950 the relative position of the Greek economy had dramatically deteriorated. According to Angus Maddison ("Monitoring the World Economy 1820-1992", OECD 1995), the Greek Income per Capita in Purchasing Power Terms fell in comparative levels from 62% that of France in 1938 (just before World War II) to about 40% in 1949.

The rapid recovery of the Greek economy was facilitated from a number of measures, including (in addition to the stimulation, as in other European countries, connected with the Marshall Plan) a drastic devaluation of the Greek drachma, attraction of foreign investments, significant development of the Chemical Industry, development of tourism and the services sector in general and, last but not least, a massive construction activity connected with huge infrastructure projects and rebuilding in the Greek cities. The latter is connected with the dramatic effect this economic growth had on Greek society and the development of its cities. This resulted in an "urban renewal" that replaced the country’s pleasant urban landscape mostly made of low-rise buildings and homes, with a monotony of characterless concrete blocks in most big towns and cities.

In economic growth terms after 1950, Greece, with the exception of the relative economic stagnation of the 1980s (the extent of which is actually counterbalanced by the evolution of the "Greek black economy" during that time), consistently outperformed most European nations in terms of annual growth. This performance made Greece an advanced economy, and Greeks today enjoy an Income per capita which is close to that of their French or German EU partners (IMF and World Bank April 2008 data).

References

* Angus Maddison," Monitoring the World Economy 1820-1992", OECD (1995)
* Paul Bairoch, Europe's GNP 1800-1975, J. of European Economic History, 5, pp. 273-340 (1976)


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