Greece

Geography

Located in southern Europe, Greece forms an irregular-shaped peninsula in the Mediterranean with two additional large peninsulas projecting from it: the Chalcidice and the Peloponnese. The Greek islands are generally subdivided into two groups, according to location: the Ionian islands (including Corfu, Cephalonia, and Leucas) west of the mainland and the Aegean islands (including Euboea, Samos, Chios, Lesbos, and Crete) to the east and south. North-central Greece, Epirus, and western Macedonia are all mountainous. The main chain of the Pindus Mountains extends from northwest Greece to the Peloponnese. Mount Olympus, rising to 9,570 ft (2,909 m), is the highest point in the country.

Government

Parliamentary republic.

History

Indo-European peoples, including the Mycenaeans, began entering Greece about 2000 B.C. and set up sophisticated civilizations. About 1200 B.C., the Dorians, another Indo-European people, invaded Greece, and a dark age followed, known mostly through the Homeric epics. At the end of this time, classical Greece began to emerge (c. 750 B.C.) as a loose composite of city-states with a heavy involvement in maritime trade and a devotion to art, literature, politics, and philosophy. Greece reached the peak of its glory in the 5th century B.C., but the Peloponnesian War (431–404 B.C.) weakened the nation, and it was conquered by Philip II and his son Alexander the Great of Macedonia, who considered themselves Greek. By the middle of the 2nd century B.C., Greece had declined to the status of a Roman province. It remained within the eastern Roman Empire until Constantinople fell to the Crusaders in 1204. In 1453, the Turks took Constantinople and by 1460, Greece was a province in the Ottoman Empire. The Greek war of independence began in 1821, and by 1827 Greece won independence with sovereignty guaranteed by Britain, France, and Russia.

The protecting powers chose Prince Otto of Bavaria as the first king of modern Greece in 1832 to reign over an area only slightly larger than the Peloponnese peninsula. Chiefly under the next king, George I, chosen by the protecting powers in 1863, Greece acquired much of its present territory. During his 57-year reign, a period in which he encouraged parliamentary democracy, Thessaly, Epirus, Macedonia, Crete, and most of the Aegean islands were added from the disintegrating Turkish empire. Unfavorable economic conditions forced about one-sixth of the entire Greek population to emigrate (mostly to the U.S.) in the late 19th and early 20th centuries. An unsuccessful war against Turkey after World War I brought down the monarchy, which was replaced by a republic in 1923.

Greece Mired in Long Civil War

Two military dictatorships and a financial crisis brought back the exiled king, George II, but only until 1941, when Italian and German invaders overcame tough Greek resistance. After British and Greek troops liberated the country in Oct. 1944, Communist guerrillas staged a long military campaign against the government; the Greek civil war, infamous for its brutality, began in Dec. 1944 and continued until Oct. 16, 1949, when the Communist guerrillas conceded defeat. The Greek government received U.S. aid under the Truman Doctrine, the predecessor of the Marshall Plan, to fight against the Communists.

Greece was a charter member of the UN and became a member of the North Atlantic Treaty Organization (NATO) in 1951. A military junta seized power in April 1967, sending young King Constantine II into exile. Col. George Papadopoulos, a leader of the junta, gradually attempted to modify his hard-line right-wing image. A coup ousted Papadopoulos in Nov. 1973.

End of Monarchy Brings Civilian Government

A referendum in Dec. 1974, five months after the demise of the military dictatorship, ended the Greek monarchy and established a republic. Former premier Karamanlis returned from exile to become premier of Greece's first civilian government since 1967. Greece has continued to be ruled by freely elected civilian governments ever since. On Jan. 1, 1981, Greece became the 10th member of the European Union. Andreas Papandreou, son of former premier George Papandreou, founded the Panhellenic Socialist Movement (PASOK) and became Greece's first Socialist premier (1981–1989).

Greece continued to experience tensions with Turkey over a disputed, unpopulated 10-acre island and over Cyprus, which is divided into Greek and Turkish sectors.

The pro-Western Socialist prime minister Kostas Simitis (1996–2004) was credited with reviving the Greek economy. Still, The Economist magazine estimated in 2001 that it would be at least another 15 years before the per capita GDP in Greece comes close to the current EU average.

Government Focuses on Hosting Successful Olympics

In the summer of 2002, the government was finally able to crack down on the 17 November (17N) terrorist organization, which had eluded the Greek authorities for the previous 27 years. The radical leftist group was responsible for more than 20 murders of diplomats and businessmen. In parliamentary elections in March 2004, the conservative New Democracy Party swept to power, defeating Pasok, the ruling Socialist Party. The new prime minister, Kostas Karamanlis, vowed to deliver a successful and safe Olympics (Greece had been criticized for being lax on terrorism), and, in spite of last-minute construction, the Athens Olympics was widely hailed as a triumph.

Some 220 separate fires ravaged the Greek countryside and threatened ancient Olympic sites around Athens in late August 2007. At least 60 people died and more than half a million acres were destroyed in the blazes. Prime Minister Karamantis faced criticism over the country's response to the devastating blazes. The anger did not carry over to the polls, however, as Karamantis was reelected to a second term in September. His center-right party, New Democracy, won 42.6% of the vote in parliamentary elections, defeating the Panhellenic Socialist Movement (PASOK), headed by George Papandreou.

Violent protests and riots in several Greek cities followed the death of a 15-year-old boy who was shot on December 6, 2008, by a police officer in Athens. The policeman was charged with premeditated manslaughter. Though the riots were sparked by the killing, they were also in protest of the government's economic policies. A general strike coincided with the protests and crippled transportation systems, banks, and schools throughout Greece. The violence was the worst Greece has experienced in years.

EU, IMF Bail Out Greece During Debt Crisis

The opposition Socialist party, the Pan Hellenic Socialist Movement (Pasok), won a resounding victory in elections in October 2009. George Papandreou, the leader of Pasok since 2004, became prime minister. A former foreign minister, Papandreou immediately faced a public financial crisis that caused fear that the country might default on its debt. Indeed, the government acknowledged that Greece's deficit had risen to 12.7% of GDP, much higher than the 3.7% reported by the previous administration. The situation prompted Papandreou, whose father and grandfather also served as prime ministers, to make deep spending cuts, crack down on tax evasion, and increase fuel prices.

In April 2010, shortly after Papandreou requested a $60 billion bailout package from the European Union and the International Monetary Fund, Standard & Poor's downgraded Greece's bond rating to junk status, a move that caused further fear that the country would default on its debt. Germany balked at the aid package without promises of strict austerity measures from Greece. While Germany stalled, the needed amount of assistance ballooned. In early May, Greece agreed to implement deep cuts to its social services, crack down on corruption, increase the retirement age, and other measures in exchange for $146 billion in aid, which will be distributed over three years. Protests broke out over the cuts, and three people were killed when a bank was set on fire. The protests quickly waned, and by the end of the summer Greece had met the economic benchmarks set by the IMF and thus qualified for the next round of aid.

Increased pressure on the euro and a still-deteriorating financial situation led to a second bailout package in 2011. In July, the "troika"—the EU, the European Central Bank, and the International Monetary Fund—agreed on a 109 billion euro ($157 billion) rescue package for Greece to address the country's financial woes. The package, however, was not sufficient to stem the recession and Greece continued to miss deficit-reduction goals and default seemed imminent. In September, in an attempt to reduce the deficit and secure another round of aid, Parliament passed a new property tax that was resoundingly criticized by the opposition and the public. Another round of austerity measures, including wage and job reductions, was introduced in late October and met with mass protests that turned violent.

In late October after protracted negotiations, the leaders of the euro zone agreed on a package meant to bring the debt crisis under control. The terms included forcing banks to take a 50% cut in the value of Greek debt and raise new capital to protect them from future defaults, increasing the euro-zone's bail-out fund to $1.4 trillion, further deep and painful austerity measures in Greece, and a reduction of Greece's debt to 120% of its GDP by 2020. Many Greek citizens and politicians condemned the deal out of frustration over Germany and France's continued influence over Greece's affairs. Days after the deal, Prime Minister Papandreou unexpectedly announced a referendum on the deal in an apparent attempt to boost his quickly waning popularity and to give voters an opportunity to weigh in on the plan and its attendant austerity measures. The move rankled several European leaders and members of the opposition and revealed a split within his governing Socialist party. Papandreou backtracked and called off the referendum after Antonis Samaras, leader of the opposition New Democracy Party, said the party would support the bailout package. Papandreou emerged badly scarred from the turmoil, but he survived a confidence vote in Parliament on November 4. Two days later, he announced the formation of a transitional unity government to manage implementation of the package and that he would resign after the country held early elections. Lucas Papademos, a former vice-president of the European Central Bank, was named as Papandreou's successor.

According to European Union statistics, Greece's debt increased to 159.1% of GDP during the third quarter of 2011, up 20% from the same period in 2010. In February 2012, parliament passed another round of stringent austerity measures, including a 22% cut to the minimum wage and the elimination of 150,000 government jobs, which was necessary to receive a second bail-out from the European Union worth $170 billion. However, before Greece can receive the money, it must first pay off creditors. The cuts went through despite violent protests in Athens on the eve of the vote. Protestors set fire to some 40 buildings in Athens and hurled Molotov cocktails.

Voters Voice Displeasure with Bailout Terms at the Polls

May 2012 Parliamentary elections were a stunning rejection of the terms of the European bailout and threw Greece's political landscape into disarray. Center-right New Democracy won 18.85% of the vote, or 108 out of 300 seats, a sharp decline from 34% in 2009. The Socialists (Pasok), who long held control of Parliament, won only 13% percent, down from 44% in 2009.

The far-left party, Syriza, which strongly opposed the terms of the EU bailout, provided the biggest shock of the election, taking 16%—52 seats. In addition, the far-right Golden Dawn party garnered nearly 7% and will be seated in Parliament for the first time, with 21 seats. New Democracy and the Socialists (Pasok), however, failed to form a coalition, and President Papoulias asked Syriza leader Alexis Tsipras to form a government. He said he would not form a government with New Democracy or Pasok unless they withdraw their backing of the bailout deal, and new elections were scheduled for mid-June. President Papoulias named Judge Panagiotis Pikrammenos as interim prime minister. Amid the uncertainty fear spread across Europe that Greece would abandon the euro—and the bailout package.

New Democracy prevailed in June's election, winning 29.7% of the vote. Syriza took 26.9%, and Pasok placed well behind with 12.3%. New Democracy formed a coalition with Pasok and the Democratic Left, and Antonis Samaras, the leader of New Democracy, was sworn in as prime minister. Samaras, who has been cool to the austerity measures and has advocated a course of growth rather than cuts, said he plans to renegotiate some of the terms of the country's bail-out packages.

Samaras succeeded in convincing the European Commission, the European Central Bank, and the International Monetary Fund, referred to as the troika, that the austerity measures were not working and were making life intolerable for many Greeks. Nevertheless, the prime minister was forced to introduce another round of cuts in the fall in order to receive the next installment of aid—and remain in the euro zone. In September, members of the troika rejected his proposed €11.5 billion in cuts, but later accepted an austerity package approved by parliament in October that included €13.5 billion in cuts to pensions and salaries while also increasing taxes. The troika said it would allow Greece to phase in the measures rather than implement them all at once. The concession did little to appease the public, and Samaras's popularity began to plummet while Syriza and Golden Dawn began to gain favorability in the polls. In November, eurozone finance ministers and the IMF agreed to a plan to restructure Greece's debt and release €34.4 billion in aid to Greece. Officials hoped the move would reduce the risk that Greece would abandon the euro.

In June 2013 in its continued pursuit of ways to save money, the government made the surprise announcement that it was suspending operations of the state broadcaster, ERT. Protests broke out, and the Democratic Left party bolted from Samaras's coalition, leaving him with a slim majority in parliament.

Parliament agreed to yet additional austerity measures in July in order to receive the next installment of bailout funds—$8.9 billion. The concessions included the elimination of 15,000 civil service positions and reform to the country's tax code.

Political and Economic Woes Take a Toll

In Sept. 2013, the anti-racist rapper Pavlos Fissas was stabbed and killed by a supporter of the neo-Nazi party Golden Dawn. The subsequent shooting of two Golden Dawn members in early November looked to be an act of retaliation. Many in Greece worried that six years of recession, unrelenting austerity measures, and soaring unemployment would send the country into a violent tailspin.

Less than one week later, on Nov. 6, at least 15,000 belonging to Greece's largest public and private sector unions, including teachers, doctors, transportation workers, and municipal employees participated in a 24-hour general walkout. Many strikers stayed home due to heavy rains. The groups were protesting the arrival of inspectors from the "troika" of the European Commission, the European Central Bank, and the International Monetary Fund.

On Tuesday, April 1, 2014, the troika review period was finally, and officially, over. International finance ministers agreed to release 8.3 billion ($11.4 billion) in loans to ensure Greece's return to solvency.

Anti-austerity Party Takes Over

Early elections were called in December 2014, after Parliament failed three times to elect a president. Stavros Dimas, former European commissioner and the candidate put forth by the government, fell short each time. In January 2015, voters handed a decisive victory to the left-wing, anti-austerity Syriza party, expressing their anger about the harsh austerity measures, which were put in place by the European Commission, the European Central Bank, and the International Monetary Fund. Alexis Tsipras, the head of Syriza, became prime minister and said he would renegotiate payment terms of Greece's debt. He referred to the austeriay plan as "fiscal waterboarding." Just shy of winning a majority in Parliament, Syriza formed a coalition with the cente-right Independent Greeks party.

Greek finance minister, Yanis Varoufakis, renegotiated the terms of Greece's bailout with representatives of the euro zone at an emergency meeting in Brussels in February. They agreed to extend Greece's bailout by four months and release an additional $273 billion in aid if Greece follows through on implementing economic reforms and fighting corruption. The Greek government said while it will comply with the agreement, it will work to eliminate the "humanitarian crisis" placed on the citizens as a result of the harsh austeritiy measures. Prime Minister Tsipras faces a challenge in satisfying the demands of the bailout and sticking to his pledge to abandon the austerity package.

Also in February, Prime Minister Tsipras nominated Prokopis Pavlopoulos as the ruling coalition's presidential candidate. On Feb. 18, the Greek Parliament elected Pavlopoulos as the new President of Greece. A lawyer and university professor, Pavlopoulos took office on March 13, 2015.

Financial Woes Continue in 2015

Greek Prime Minister Alexis Tsipras

AP Photo/Geert Vanden Wijngaert

Greece missed a critical debt payment of 1.5 billion euros to the International Monetary Fund (IMF) in late June 2015, increasing the country's financial crisis. The country's international creditors refused to extend Greece's bailout program. The IMF placed Greece in arrears, a classification used to avoid saying a country that doesn't pay its debt on time is in default.

The missed payment created alarm and chaos. Greece shut down its banking system, ordering its banks closed for six days, starting Monday, June 29. The same week, Standard & Poor's released a statement about Greece that said, "a commercial default is inevitable within the next six months."

Prime Minister Alexis Tsipras called for a referendum where voters in Greece would decide whether or not to accept the terms of the country's creditors. Tsipras urged voters to choose "no," which was met with Pro-European protests in Athens. Tsipras wrote a letter to the international creditors, which said that Greece would accept the bailout offered if many of the conditions were changed. However, Chancellor Angela Merkel of Germany dismissed Tsipras' letter, saying that the letter was too late and that there should be no more negotiations until Greece holds its referendum.

In the referendum held July 5, 61% of voters backed Tsipras call to vote "no" on the proposed budget cuts by creditors. Creditors had proposed the cuts in return for loans that Greece needs. After the referendum, European leaders said that negotiations with Greece would resume. However, the chance of Greece staying in the euro looked slim. Banks remained closed for a sixth working day on Monday, July 6. Also, the government continued limits on money transfers and ATM cash withdrawals to control the drain on deposits. Finance Minister Yanis Varoufakis, a contentious figure seen as an obstacle in further negotiations, resigned the day after the referendum. He was replaced by Euclid Tsakalotos, an economist who had been negotiating with Greece's creditors.

After a week of tense negotiations, Tsipras and eurozone leaders agreed to a deal on July 13. As part of the deal, Greece will receive a third bailout package worth about $95 billion as long as parliament quickly agrees to a series of reforms, including increasing taxes, cutting back on pensions and raising the retirement age, reforming the financial sector, and the creation of a fund that will take control and manage about 50 euros in government assets. The assets will be sold to pay off some of the country's debt and to fund investment programs. The package did not include debt relief, but it temporarily calmed fears of a "Grexit," or exit from the eurozone. The Greek parliament approved the plan. Banks, which have been shuttered for about three weeks, opened on July 20.

However, the latest deal created tension within Prime Minister Tsipras' Syriza party. A month later, on August 20, Tsipras resigned due to Syriza's infighting. An interim government was formed with Judge Vassiliki Thanou-Christophilou taking over as prime minister until September 20, when an election would be held, Greece's third election in 2015. In assuming her temporary role, Thanou-Christophilou, also president of the Court of Cassation and the country's most senior judge, became Greece's first ever female prime minister.

In the September snap elections, Alexis Tsipras once again led his Syriza party to victory. Tsipras won 35% of the vote, and 145 of 300 parliament seats, just four fewer seats than in previous elections. On Sept. 21, 2015, Tsipras took office as prime minister again.

See also Encyclopedia: Greece

U.S. State Dept. Country Notes: Greece

National Statistical Service www.statistics.gr/ .