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Greece Postwar Recovery
http://www.photius.com/countries/greece/economy/greece_economy_postwar_recovery.html
Sources: The Library of Congress Country Studies; CIA World Factbook
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    The postwar reconstruction efforts of the Marshall Plan (formally the European Recovery Program) and new economic cooperation in Western Europe provided no immediate benefit to Greece, which underwent a bloody civil war from 1946 until 1949. A new round of destruction of wealth, inflation, and economic instability lasted until the early 1950s. Significant amounts of United States aid went to Greece during this period under the Truman Doctrine and later under the Marshall Plan, establishing a long pattern of dependency on Western benefactors. Total United States aid to Greece from 1947 to 1977 amounted to US$5 billion. In the early postwar years, most of the aid was in the form of grants for outright military assistance or given in connection with military requirements and war-related economic needs.

    The Civil War ended in 1949, but economic stabilization was achieved only in 1953. The starting point of postwar recovery was a package of domestic economic measures passed in 1953, which included a 50 percent currency devaluation, laws for the protection of foreign investment, and banking regulations to control inflation and speculation. Extensive public investments in infrastructure (roads, seaports, airports, and electric and telecommunications networks) were undertaken under the leadership of Konstantinos Karamanlis, first as minister of public works (1952-55) then in his first term as prime minister (1955-63). The 1953 program began twenty years in which Greece would achieve high growth rates, effective industrialization, export expansion, urban growth, and significant--although uneven--prosperity for its population.

    The period from the late 1950s to the late 1960s has been characterized as the era of the "Greek economic miracle," during which the gross domestic product (GDP--see Glossary) grew at the fastest rate in Western Europe, averaging 7.6 percent annually throughout the 1960s. Industrial production grew at an average annual rate of 10 percent over the same period, exceeded in Western Europe only by Spain's performance. In the 1960s, manufacturing exports surpassed agricultural exports for the first time in Greece's history, partly because of large foreign investment in industry that boosted capital-intensive manufacturing activities. The most significant projects in this category were a refinery and petrochemical complex of Standard Oil of America and an aluminum complex built by the French company, Pechiney Ugine Kuhlmann. Other development in shipyards, chemical plants, pharmaceuticals, metallurgy, and electrical machinery was also undertaken, associating the largest investments in Greek manufacturing with foreign ownership.

    Economic growth, industrialization, and urbanization caused social tensions in the 1960s associated with the inequitable distribution of new wealth. Neither the centrist government of Georgios Papandreou (1964-65) nor the military junta that took power in 1967 was able to ameliorate conditions. The military dictatorship simply favored specific economic interests, notably large tourist enterprises, urban real estate and construction, and shipowners. The basic weaknesses of the Greek economy, including social inequities and the lack of competitiveness in the country's new manufacturing sector, remained untreated. They would resurface in acute form with the world economic crisis of the early 1970s.

    The first energy crisis and the international monetary turmoil following the Arab-Israeli War of 1973 had an adverse effect. When exports could not cover the higher cost of foreign oil, a large deficit resulted in the Greek balance of payments, and the domestic economy suffered serious inflationary pressures. Such economic problems increased popular resistance to the dictatorship and contributed to its collapse in mid-1974.

    Data as of December 1994


    NOTE: The information regarding Greece on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of Greece Postwar Recovery information contained here. All suggestions for corrections of any errors about Greece Postwar Recovery should be addressed to the Library of Congress and the CIA.

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