Greece - US Department of State

Greece 787
to economic policies followed by Coordination Minister Makarezos. In
April 1967, Greece was in the midst of a recession, which had been
brought on in part by political uncertainties and a series of strikes. By
1969, Greece had fully recovered. Gross national product at constant
prices rose over eight percent in that year and only slightly less than
that in 1970. Prices have remained relatively stable.
12. In part this improved situation—particularly in the balance of
payments—resulted from developments outside the control of any
Greek government. West Germany has recovered from a mild recession,
permitting a large number of Greek workers to find jobs there in
the last two or three years, and to send home substantial remittances,
amounting to $343 million in 1970. Greece’s booming tourist trade—
amounting to $194 million in 1970—has been little affected of late by
the bad publicity given the junta in North America and Western Europe.
The closure of the Suez Canal and the world-wide shortage of
tankers have boosted revenues earned by Greece’s large shipping
fleet—though this may have been offset by losses sustained by ship repair
and bunkering facilities. In any case, foreign exchange reserves are
now 14 percent higher than the pre-coup level.
13. But economic recovery has been due to more than fortuitous
circumstances. Another important factor in easing Greece’s balance of
payments problem has been a sharp rise in exports, resulting partly
from new government policies designed to make Greek goods competitive
on the world market, and to prepare the country over the long
term for entry into the European Common Market. In agriculture, the
regime has encouraged increased exports of such profitable crops as
fruit and vegetables in place of wheat and tobacco. Financial incentives
have been provided to export industries, and industrial policy has encouraged
the inflow of foreign capital. 2 Fiscal incentives and other
forms of support have been given to encourage further growth in
tourist facilities and in the shipping industry.
14. The regime has followed basic policies favorable to economic
growth: a) reliance on free enterprise; b) observance of their agreements
for adherence to the Common Market; c) use of normal monetary and
fiscal controls rather than more direct intervention in the economy;
d) removal of balance of payments restraints on growth through borrowing.
Since early 1968, the regime has been implementing, as a guideline,
a five year plan based on that of Andreas Papandreou, with such
ambitious long-term goals as raising income levels to those of advanced
countries, improving income distribution, and increasing social services.
2 In 1970, some $51 million came in under the investment law. This compares with
about $48 million in 1966, the last year before the coup. [Footnote in the original.]