By: Alexa Panourgias
Overall Score: 54.0 World Ranking: 130
Quick Facts about Greece/United States
7 Major Sources Of Economic Progress
It is said that a legal system is the foundation for economic progress that is a legal system that protects privately owned property and enforces contracts in an evenhanded manner. For Greece this is the Civil Law Tradition which is prevalent in continental Europe and has evolved from Roman Law.
It is said that a competitive market is the competition that promotes the efficient use of resources and provides a continuous stimulus for innovative improvements. For Greece this deals with its GDP and how it has contracted for six successive years and the rate of unemployment rose to 27.6%. They have poor competition. Prices in many sectors are not falling, suggesting competition problems that will add to the hardship of poorer consumers as their incomes fall. Longer term, uncompetitive markets harm growth.
Limits on Government Regulation
It is said that limits on government regulation are regulatory policies that reduce trade also retard economic progress. Income tax in Greece for the year 2008 were 0% (up to 12,000 euros), 27% (from 12,001 to 30,000 euros), 37% (from 30,001 to 75,000 euros) and 40% (above 75,000 euros). For tax year 2009 the respective rates were the same, but since 2010 brackets and rates changed a lot.
An Efficient Capital Market
It is said that an efficient capital market is to realize its potential, a nation must have a mechanism that channels capital into wealth-creating projects. But, Athens, Greece’s new left-wing government is now canceling plans to sell the state natural gas utility and is firmly opposed to a Canadian gold mine that is among the biggest foreign investment projects in the country. The more radical wing of the ruling Syriza party, further reinforces early signs that the government is sticking to campaign pledges that have chilled investment and unnerved financial markets.
It is said that the monetary stability is the a stable monetary policy is essential for the control of inflation, efficient allocation of investment, and achievement of economic stability the inflation rate in Greece was recorded at -2.20 percent in February of 2015. Inflation Rate in Greece averaged 8.96 percent from 1960 until 2015, reaching an all time high of 33.70 percent in January of 1974 and a record low of -2.90 percent in November of 2013. Inflation Rate in Greece is reported by the National Statistical Service of Greece.
Low Tax Rates
It is said that low tax rates is when people will produce more when they are permitted to keep more of what they earn. In Greece, the Corporate Income tax rate is a tax collected from companies. Its amount is based on the net income companies obtain while exercising their business activity, normally during one business year. The benchmark we use refers to the highest rate for Corporate Income. Revenues from the Corporate Tax Rate are an important source of income for the government of Greece.
Interesting Facts about Greece's Economy:
- Greece’s GDP has been declining since Q4 2008, and is now just above 2004 levels. What is more, the initial program agreed to with the troika forecasted that real GDP would not reach its pre-crisis level until the end of the decade. A greater than anticipated recession means it could take past 2020 for Greece to recover to the income level it had coming into this crisis.
- When analysts discuss how the Greek economy may grow, there is an inevitable emphasis on tourism. But tourism has been in steep decline in the last decade. In 2000, Greece’s tourism revenue was €10 bn (based on customs data). Ten years later, it had fallen to €9.6 bn, a 4.5% drop. But if we factor in inflation, revenues from tourism have dropped 28% since 2000, reflecting the structural flaws in Greece’s tourism industry, which relate, chiefly, to getting more tourists who spend less money.
- Shipping, Greece’s other major export, has performed better than tourism but only marginally so. In 2000, Greece’s revenues from shipping netted €4.6 billion. By 2010, that number had fallen to €4.5 billion. Adding inflation means that the drop has amounted to 27%, although some years were better than others. The chief problem is that from a trade perspective, shipping affects both sides of the equation due to money spent to buy ships and on shipping related services. When we take out the outflow of money, the net effect for Greece has been declining.