Greek economic miracle
Encyclopedia
The "Greek economic miracle" was the high rate of economic and social development in Greece
from 1950 to 1973. The economy grew an average of 7% a year, second in the world only to Japan
during that period. Growth rates were highest during the 1950s, often exceeding 10%, close to those of a modern "tiger economy". Industrial production also grew annually by 10% for several years, mostly in the 1960s. Growth initially widened the economic gap between rich and poor, intensifying political divisions. The term "miracle" is actually little used in Greece.
From 1941 to 1944, Axis occupation of Greece during World War II and the fierce fighting with Greek Resistance
groups had unprecedented devastating effects on the infrastructure and economy (notably, forced loans demanded by the Occupying Regime severely devalued the Greek drachma
). Furthermore, after the end of the World War, Greece engaged in a bitter Civil War
until 1949. By 1950 the relative position of the Greek economy had dramatically deteriorated. The income per capita in purchasing power terms fell from 62% of France
's in 1938 to about 40% in 1949, according to economist Angus Maddison
.
The rapid recovery of the Greek economy from 1949 was facilitated by 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 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, 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 of mostly low-rise buildings and homes with a monotony of characterless concrete blocks in most big towns and cities.
The high growth period ended abruptly in 1974 with the collapse of the military junta, when the country recorded its worst annual contraction in GDP (about 5%) in its post-war history. Marginal GDP contractions were also recorded in the 1980s, although these were partly counterbalanced by the evolution of the Greek black economy during that time.
In total, the Greek GDP grew for 54 of the 60 years following WWII and the Greek civil war. From 1950 until the 2008 economic crisis, with the exception of the relative economic stagnation of the 1980s, Greece consistently outperformed most European nations in terms of annual economic growth.
Greece
Greece , officially the Hellenic Republic , and historically Hellas or the Republic of Greece in English, is a country in southeastern Europe....
from 1950 to 1973. The economy grew an average of 7% a year, second in the world only to Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
during that period. Growth rates were highest during the 1950s, often exceeding 10%, close to those of a modern "tiger economy". Industrial production also grew annually by 10% for several years, mostly in the 1960s. Growth initially widened the economic gap between rich and poor, intensifying political divisions. The term "miracle" is actually little used in Greece.
From 1941 to 1944, Axis occupation of Greece during World War II and the fierce fighting with Greek Resistance
Greek Resistance
The Greek Resistance is the blanket term for a number of armed and unarmed groups from across the political spectrum that resisted the Axis Occupation of Greece in the period 1941–1944, during World War II.-Origins:...
groups had unprecedented devastating effects on the infrastructure and economy (notably, forced loans demanded by the Occupying Regime severely devalued the Greek drachma
Greek drachma
Drachma, pl. drachmas or drachmae was the currency used in Greece during several periods in its history:...
). Furthermore, after the end of the World War, Greece engaged in a bitter Civil War
Greek Civil War
The Greek Civil War was fought from 1946 to 1949 between the Greek governmental army, backed by the United Kingdom and United States, and the Democratic Army of Greece , the military branch of the Greek Communist Party , backed by Bulgaria, Yugoslavia and Albania...
until 1949. By 1950 the relative position of the Greek economy had dramatically deteriorated. The income per capita in purchasing power terms fell from 62% of France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
's in 1938 to about 40% in 1949, according to economist Angus Maddison
Angus Maddison
Angus Maddison was a British economist and a world scholar on quantitative macroeconomic history, including the measurement and analysis of economic growth and development...
.
The rapid recovery of the Greek economy from 1949 was facilitated by a number of measures, including (in addition to the stimulation, as in other European countries, connected with the Marshall Plan
Marshall Plan
The Marshall Plan was the large-scale American program to aid Europe where the United States gave monetary support to help rebuild European economies after the end of World War II in order to combat the spread of Soviet communism. The plan was in operation for four years beginning in April 1948...
) a drastic devaluation of the 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, 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 of mostly low-rise buildings and homes with a monotony of characterless concrete blocks in most big towns and cities.
The high growth period ended abruptly in 1974 with the collapse of the military junta, when the country recorded its worst annual contraction in GDP (about 5%) in its post-war history. Marginal GDP contractions were also recorded in the 1980s, although these were partly counterbalanced by the evolution of the Greek black economy during that time.
In total, the Greek GDP grew for 54 of the 60 years following WWII and the Greek civil war. From 1950 until the 2008 economic crisis, with the exception of the relative economic stagnation of the 1980s, Greece consistently outperformed most European nations in terms of annual economic growth.
Further reading
- Takis FotopoulosTakis FotopoulosTakis Fotopoulos , born , is a political philosopher and economist who founded the inclusive democracy movement. He is noted for his synthesis of the classical democracy with the libertarian socialism and the radical currents in the new social movements...
, "Economic restructuring and the debt problem: the Greek case," International Review of Applied Economics, Vol. 6, No. 1 (1992). Retrieved: 5 May 2010.