Greece - The economy

RESTRICTED UN Report No. EA- 151 Inwsreport was prepared Tor use within The Ban.K and ITS aIlliated organizations. They do not accept responsibility for its accuracyor completeness. The report may not be punitsnea nor may it be quorea as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION THE ECONOMY OF LI L4 X%J.L.4 L% O. June 3, 1965 Europe and Middle East Department CURRENCY EQUIVALENTS U. S. $1 = Dr 30 U.S. $0. 0333 Page Basic Data -nTfDfMnTTe,M1'1%kT .1 .11 .L6VALJVV.LLV4 . . . . . . . . . . . ... . . . . . I .LUV±WivftI 2£'.UA1LU ulluvViii ... .. .. *.. .. ......... Consumption, Saving and Capital Formation . . . . . . . . . . 2 rraces, Wages and income m IuJon ..s.r......... Labor and Employment . . . . . . & . . # . . . . . . ..4 DEVELOPMENTS AND PROSPECTS OF MAJOR SECTORS . . . . . . . . . . . Agrculture . . . ... . . . . . . . . . . . . . . . . Fishing . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 inustry . . . . . . ... . ...... . . .u.........1 Mining- . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Touris'.m . . . . . . . . . . . . . . . . . 1 Power . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Transport . . . . . . . . . ... . . . . . . . . . . . . . . . 2 PUBLIC FINANCE . . . . . . . . . . . . . . . . . . . . . . . . . .15 The Current Budget . . . . . . . . . . . . . . . . . . . . . 16 Government Revenue . . . . . . . . . . . . . . . 16 Investment Budget. .......... . . . . . . . . . . . . 17 Financing of Government Investment . . . . . . . . . 18 The Role of Public Agencies . . . . . . . . . . . . . . . . .18 MONEY AND CREDIT . . . . . . . . . . . . . . .. .. . . . . . . . 15 Growth of Credits Extended by the Banking System. . . . . . . 20 Sources of Finance . . . .... . . . . . . . . . . . . . . 21. BALANCE OF PAYIHENTS . . . . .. . . . . . . . . . . . . . . . 23 Exports: Growth, Structure and Distribution . . . . . . . . 25 Imports: Growth, Structure and Distribution . . . . . . . . 25 Terms of Trade . . . . . . . . . . . . . . . . . . . . . . . 26 Services and Private Transfers....... ...... . . . 26 Capital Flow . . . . . . . . . . . . . . . . . . . . . . . . 27 Foreign Exchange Reserves and Liabilities . . . . . . . . . . 27 Trade Relations . . . . . . . . . . . . . . . . . 28 Prospects for Balance of Payments . . . . . . . . . . . . . . 28 EVALUATION OF ECONO4IC GROWTH PROSPECTS . . . . . . . . . . . . . 29 Basic Policies of the Government . . . . . . . . . . . . . . 20 STATISTICAL APPENDIX . . . . . . . . . . . . . . . . . . . . . . . BASIC DATA Area: 131,000 square kilometers Population:(196L) 8.h million National Income Per Canita: (1963) $It0 194Q 1(-7 ln 14S i, Gross m)ntrin Produnt: (in billion Dr) 1 A 79 9 Ah 1 111 Q Of' which, in penrcennages: Agriculture 34.3 34.6 28.2 28.9 Services 41.7 41.o 44.3 U.3 GDP at constant prices (1954=100) 100.0 122.9 136.7 170.0 Rate of grcwth (1954-63) 6.1% Gross domestic fixed capital .Lorma-ionU. as ja 4.L UUEL (a) including ships 16.9 17.2 30.8 22.6 ku; -4c-LJuuiJng Z:upb ±14. Y L; . 4~..( ee.) Public Finance: (in billion Dr) Tax revenue as 7 of GDP - 1 .55 16.1 17.1 Current revenue (incl. NATO contributions) - 13.7 16.0 21.4 Current expenditure - 13.2 14.9 20.0 Current surplus - 0.5 1.1 1.! investment expenditure - 2.2 4.1 5.1 Money Supply: (end of period) (in billion Dr) 6.2 10.3 15.6 23.6 Prices: Wholesale prices (1952=100) 130.9 152.2 153.2 163.9 Consumer prices (June 1959=100) - - 102.3 106..9 Balance of Payments: (in million $) Imports 330.0 524.0 520.3 748.4 Exports 151.9 226.6 210.0 296.0 Trade balance -178.1 -297.4 -310.3 -452.4 Net services and current transfers 94.1 186.0 207.7 356.4 Foreign Exchange Reserves: (in million $) 131.5 178.9 223.5 277.9 External Public Debt Outstanding: (Dec. 1964) (in million $) 343.0 Suppliers' Credit: (October 1964) (in million $) 190.0 SUMMARY AND CONCLUSIONS 1. Postwar economic growth in Greece had a late start. Peace emerged only at the beginning of the fifties and for some time afterwards unstable conditions prevailed. 2. Severe fiscal and monetary measures and the devaluation of the drachma in 1953 led to the subsequent stabilization of the economy, re- establishment of confidence in the currency, a rapid increase of private deosits with the banking system. a steady growth of foreian exchange re- serves and a remarkably slow rise in prices. Since the mid-fifties, sub- stantial recovery and expansion of production have taken place. Gross domestic product at constant prices has risen over the last ten years at an average annual rate of 6%. 3. However, a number of nroblems remained unresolved. UnemDlovment and underemployment are still heavy despite increasing emigration, and larce income disarities bet.wen reions and sectors of the economy ner- sist. The structure of agricultural production is changing only slowly. SmallI frno"Pn+Pi nnel inpfini-n+ fn*'m iinit..- wit.h i.rqrIi+,inI or~i ronn nre characteristic for most of the country, yielding low cash incomes even ,r,T +h rr mrp -r-nmcW-n+ q ifqi r] ti pq A~ e,v"q 111 +117-01 T~-NnI -n An Mren. -t1 r fin~m- in+c political and social considerations. 4. Industrialization is sought as a solution for many problems. %4 4Al L %LIU .J*, & .J I.J AW LL%, U.L%JXI- ')V LL% U1 uta L. 0 V L'~~U J. '.JVVJ6 Ih '. L dustrial output has remained moderate despite high tariff protection and .increased. 5. Currently, association with the European Economic Community in- creases theL= pressure for-- Chnanges in the ProuctionLV and mreigofL products of both.agriculture and industry. The effect of limited growth of exportS on the balance of payments has been counterbalanced by rising foreign.exchange earnings from tourism and remittances from emigrants and workers abroa, ad aI LIU_cU.1t iflo.w ofL capitLa.. 6. ivestment has risen rapidly and flxed invstment now amounts to about 23 of gross domestic product. From 1957 government savings have contributed increasingly to the financing of public investment which had previously been sustained by American aid. However in the last few years the expansion of government expenditure has tended to slow down tne growth of public savings. Public investment policies are being reviewed and a five-year plan is being prepared. 7. The recovery and the expansion of the economy over the last decade have been impressive. The postwar debt has consistently been serviced and in the last few years Greece has made arrangements for the settlement of major parts of its prewar debts that have been in default. With a moderate external.debt service burden, and given continued progress towards settle- ment of the outstanding debt, Greece is regarded as creditworthy for a sub- stantial amount of additional foreign debt. INTRODUCTION 1. The Kingdom of Greece covers an area of about 131.000 square kilometers with a population of 8.5 million. About two-thirds of the country is mountainous, most of it close to the sea and with numerous scattered islands up to 200 miles from the mainland. Only about one-third of the land is arable. rou-hly half of it in the plains. Apart from the general backwardness of the country, lack of adequate irrigation and severe soil erosion have been imnortant in limitinc economic deveopntrent- The population is unevenly distributed, with the Athens area accounting for Plm%tao-aneiArnI and the innqyos fi ihnc t+. n-v-P of the total which was overcome only at the beginning of the last decade. But from the scond~m half o~f 4-he fiftie 1-itillH 1,6 rih - -i ng anicmm-izt r7r%-tr -rn,-n brought political stability. At the end of 1963 the Center Union Party led by el-der statesm.n G. Papandrnou, a 1--er-ber of parties W"e inA OpposiVIO to the previous regime,with progressive policies,but often divergent inter- V.S WJ ~ A J~ . * L&VU, JV ' I~II U .I J _L V.4 j. J .L V4 J .1 II v LA.%~J1I0 LI February 1964 and now commands 171 of 300 seats in the Parliament. Most of ILW WJULMID~ CLIU LIUL UY LILIZ~ L.L6LIU WL1lr UjVJ.P .L_11, L)UL., LLf1t; LO d.~Ja~L stantial left wing, largely communist group. 3. At the beginning of the fifties, inadequate domestic production of basic foodstuffs, a destroyed transport system, acute shortage of public finances and a breakdown of the monetary and credit system brought about, economic disorganization and inflation. inflation was brought to an end by severe budgetary, credit and other measures, culminating in the devaluation of the drachma in 195. Since then, with careful credit and fiscal policies and American aid, production has expanded substantially, accompanied by a remarkable price stability. 4. However, the structural transformation of the economy has still to be accomplished. It is hoped that Greece's association with the European Economic Community will help hasten the process of growth and provide the needed incentives to modernize the productive structure of the economy. POSTWAR ECONOMIC GROWTH 5. In the period 1954-56 to 1961-63, the gross domestic product at 1954 prices increased from Dr 55.2 billion to Dr 82.7 billion, at an overall rate of 6% annually, fluctuating between 3% and 12%, largely with agricultur- al output. Per capita income increased at an annual rate of 5.3% and it was estimated at about Dr 13,500 ($450) in 1963. - 2 - PERCENTAGE COMPOSITION OF GROSS METIC PRUUUCT AT CURRENT PRIES Average of Average of Annual Growth Rate 1954-56 1961-63 (at 1954 prices) Agriculture 34.1 29.2 3.9 Industry'a! 24.3 26.8 8.2 Services l.6 44.0 6.2 Total 100.0 100.0 GDP in billion drachmas 59 103 6.0 a/ Including electricity, Ras and water works, construction and minina, and quarrying. Agricultural production at 1954 prices increased from Dr 16 billion in the early fifties to Dr 2q billion in the early sixties. Industrial nroductior. which expanded at 10% per annum in the first half of this period, slowed down in the second half and was estimated to have contributed an average of Dr 24 billion to the total in the early sixties. Of the sectors comprising the industry groun- manufacturina has arown lps ranidly and construction more rapidly than the others. Services is the largest single item in gross domestin nrnint and its mutnut innrP.cei frnm nr 90 billion in the early fifties to Dr 35 billion in the early sixties. Its rate of growth has been hichpr ip thmiti_fif.Az- +.hnn in the earlier ni-rind mainly duii to .sib- stantial growth of transport and communication, wholesale and retail trade 6. L,mited data on sectoral incme 4isributi+-on suggest that although' agricultural income per capita has increased, it remained at about three- has risen to about double the per capita income in agriculture. Such data gest that only the Athens area had a higher per capita income than the Consumptil1on, saving and Capital FormaUTlon S. In the last decade, real gross expenditures o the economy almost doubled, growing at an annual rate of 6.6%. Consumption increased at 5.6% per annum, at 6% for private and 37 for public consumption. Private con- sumption has undergone significant changes with a trend towards consuming more foodstuffs associated with a better standard of living. Durable con- sumer goods also are in much wider use than in 1952; for example, the number of private cars in use is estimated to have risen from 5,600 in 1952 to 50,100 in 1962. n-1 A ey 'hn rvtan 7" m "Vr.n +11nn~ 9t-#- a Irn 4 i +Ino lf3Q+. lor' nrl~o +.11 a largest expansion occurring in the early sixties. Both net and gross tances from emigrants and workers abroad contributed increasingly to the fo nn. -o or.~4 f l --ing -;C -n n ------ - -. +1- r ---nC --;-'NnV rc - +4- w1 4 ,.d.- 0 excludes unilateral transfers from abroad, declined in the sixties. 9. A relatively moderate growth of consumption and a. substantial ing ships) at 13.5% per annum during 1954-63. Its proportion of gross able expansion of gross domestic fixed asset formation has been accormpanied by signifiLcant shifU in it composion. PERCENTAGE DISTRIBUTION OF GROSS FID Accom Dn amT,T C, Cr:nV ST:-m n Average of Average of Sectors 1954-50 1901-63 Agriculture, etc. 7.8 !L-5 Mining and quarrying 1.2 1.2 Manufacturing 11.0 10.1 Electricity, etc. 11.8 7.1 Transportation & Communication (excel.ships) 11.6 22.2 Dwellings 41.7 31.4 Public Administration 2.3 1.0 Other industries 12.5 12.6 Total (excluding ships) 100.0 100.0 The substantial increase in the share of investments for transport reflects the Government's concern to create the infrastructure for a more rapid development of industry and tourism. Agriculture has absorbed a relatively small but increasing part of total investments. Ii.vestment in manufacturing and mining has been less than anticipated, showing a large decline in its share in the early fifties and.relative stagnation thereafter. Although some encouraging developments have taken place recently, a distinct reversal of the trend does not appear to be assured as yet. Housing of all kinds is still by far the principal investment activity, but conditions for many urban low-income families are still unsatisfactory. However, it is signif- icant that external funds accounted. for about 35% of gross capital formation in 1954, but provided only 20% of the total in 1962. 10. Desite ooosina trends in investment. ariculture's contribution to gross domestic product has declined from 34o6% in 1951-53 to 29.7% in 1961-63. whereas the share of manufacturing has increased in the same neriod from 16.5% to 19.4%. These trends suggest scope for a review of allocation of resources. both as between and within spctors of nrnint.ion Prices and W-ages 11. Prices have shown remarkable stability in Greece. Both wholesale and consumer price indices have increased by less than 1% a year between 1958 and 1962. During 1963 and 1964, however, they rose much faster but still at moderate annual rates of about 6/ and 2% respectively. A considerable part of the recent increases can be attributed to higher prices for foodstuffs and for beverages and tobacco. To check price increases of basic foodstuffs, the Government announced a number of measures in June 1961. the effect of which is reflected in a slight decline of the consumer price index in the third quarter of the year. 12. Statistics of wages are scanty. Minimum rates of wages and sala- ries have increased by about lqt over the 19q8 level. The M4av 196h auarter- ly survey of employment and payrolls in industry indicated that average wages reneivd ry workprs varied widlv wiith the national averna beinr Dr 406 per week. Those employed in basic metal, transport equipment, -nAt.o trni nn ri rtiro, nnrl nii'hI i qMna rinrp ~- P+_T~PPn November 1961 and May 1964, the average income of an industrial worker rose by about 90r and of Itrh04+n pn11twit employee by abou l4 A1 IVIV' .1. 01. 'J4 adA. C.J ..1N.J. -LC &AL LLa.J JJUL ULIU . LE X PV jJ UC L.(I JJ±A highly "mature". More than two-fifths of the total population was economi- %,CL".Y acAA'' L LV 1 .44 V.AJ. C2.41U 114UGLI-Ly IRo UL WiIU -LCLUUL- L ~ W1 ~ LU_11.. 4.'. ' I41 -A-d - .- 1b r fr e w s c n -d r d un- employed. Approximately 56% of the employed population was in agriculture, 2V0 in iLndustry-. and thef rest in service sectors. I,: illi".L~ iL~tlLhigh by European standards. Less than 2% of the population have had either -L. Since the L61 census, information about the employment 5siuation is fragmentary. Surveys of firms employing more than ten persons indicate a rise of 2.5512 in industrial employment between November 1961 and june 196. However, this small increase seems to have been offset by a 2.8o drop in wUe average number of hours worked by an employee. Ull.Ia. unempLoymet statistics suggest a fall in the registered unemployed which is partly due to a surge in emigration in recent years. 15. Unemployment continues to be the main problem. The fact that con- siderable growth in industrial production in the last decade was not accompa- nied by higher industrial employment clearly brings out the problem associ- ated with absorbing more people in the economy. There is in addition chronic underemployment in agriculture, estimated at around 1 million in 1964, and much underemployment in the service sector. 16. Emigration has to some extent relieved unemployment and in recent years corresponded to about the natural rate of growth, leaving the country with the population no greater than in 1961. Between January 1961 and June 1964, approximately 295,000 people--about 55,000 more than those who were considered unemployed--left the country. Emigration has reduced the supply of skilled and semiskilled labor and the departures of farmers, coupled +V.4 *h *.- 4 1~-*n~ ~ ~~- + + n -4 V -'anvn+-1,~flf'nal a shortage of farm labor in certain localities. There are no data on the I ~ I U ~ILL~ dl U VUU U J. U _LO UL1V%Ar~LAL LOICLVU 1 _A. ~U±JA4 11 iII L l,.0 UO ii0A L-U-. about 25% to 30% of emigrants in the last three years. Emigration of SAL--Ld n s1eiilr±ledI workrs i no aC;U-mpa1n"CLLeI LJ.Y Lim; reur UALiLIAL .LC4 numbers of past emigrants is believed to be a serious constraint to long- ber economic growth, aUu LmeaVure nave Ueen Atl t.Uo tu enIvuurag Une return of emigrants by providing incentives, such as financial assistance, to start small-scale industries. 17. Educational reforms are being viewed as a means among others to solve the structural unemployment problem. Budgetary allocations for general and technical education in particular have been increased. A recent study on education development and manpower requirements estimates that, to meet the increasing requirements of the economy, education expenditure as a proportion of GNP would have to be raised from 2.1% in 1961 to 3.2% in 1974. 18. In the short-run, the Government plans to increase the supply of skilled workers by expanding training. In 1964 over 6,000 students were enrolled in 46 schools under the apprenticeship program and the aim is to raise enrollments to produce 3,000 graduates a year, compared to about 1,000 in 1964. Accelerated training centers designed especially to benefit un- employed and unskilled adults have been opened and it is expected to train about 2,000 people a year. A recent government study estimates that, to re- move the shortage of skilled labor, about 10,000 people would need to be trained at the centers every year. Improving the efficiency of workers is the main objective of retraining programs. In 1964 over 800 graduated under this program and the scope and size of this training will be enlarged. 19. The labor movement is still in an infant stage and trade union leaders are moderate. Although the number of strikes has increased in the last two years, industrial production was not affected noticeably and the conciliation machinery seems to have worked successfully. DEVELOPMENTS AND PROSPECTS OF MAJOR SECTORS Agriculture 20. Aariculture provides employment for about one half of the total working population but only accounts for rather less than one-third of GNP. Agricultural products comprise some 80% of the value of all exports. Al.- though there has been a slight tendency for agriculture's share of GNP to decline. it is broadly correct to say that the current position of agri- culture relative to the rest of the economy is little different from what it was in 1950, except that its growth has slowed down considerably in recent years. 1/ 21. Since 1950, agriculture output has expanded by about 6% per annum. But this conenl the denTinn frng. abt 7.* in t- earlyv vrs to I . In ' 1/ Including forestry-and fishing. - 6 - in the last five years. Since 1950 there have also been some substantial changes in emphasis. The production of wheat, which accounts for about one-third. of the cultivated area, has almost doubled. and Greece is now more than self-sufficient in wheat. The production of cotton has more than doubled and there has been a fourfold increase in citrus production, main- ly the result of additional plantings. Tobacco, the most important export commodity, has exoanded by only about one-third. Similarly. sultanas and currants, which are also traditional export items, have expanded only modestly. On the livestock side. the most striking changes have been in the largely undesirable increase in the numbers of sheep and goats which, while leadinp to som inCranse in meat and cheese nrnduc.tinn. have also intensified the problems of soil erosion. 22. Natural conditions in Greece are not highly favorable for agri- n1 ture. TI. i. nredlminantly a monntainous cunt.ry with diffiilt terrain and the added. complication of numerous scattered. islands which reflect more nr~~ I nq q r-n-nrli i3 n,- rmn +_. rnni nI nnr 87,000 C-1+n'k1n Pnf~-r r.,i11+ATrn,~+An n-c generally confined.to coastal plains. Climate is favorable, but typically season, and quite a lot in the winter months. Given the possibility of nnnC csrn ne + i4 I,; _-+ a.,n" "- _P'l -1 a ir rt,rA,.trn, s+a, oA i t it during the growing season, the picture is radically changed. and. abundant M.JSuJ~ .J4 mi.5 14..,Li cLSLt~ u IIi}.Jv± O.U CLJU. 0LLU-U± SUPI.kd.L P.1VUUL,V %. ,cul UJ. SS.Ls4 1i.;L1 of. Uile LI ULLJLA ctluct _L L~IU.1d L U UL.5UU II_1U ± CLjLL d U. undesirable inroads continue to be made on the forest area by grazing _1 c".Ls 0 A lltU . aL thir. U.s. Ullu ±iJJIi PUPU_Uj. L )1j --t:IJ P~ ± fCLIuj.. .Ln1jUUU uU11- munities in the upland and mountainous areas. Here, conditions are bad. and i3cume unug opportur:tes extremely 11mite. Sheep and goats figure prominently in the agricultural economy of the mountains and the numbers of these animals greatly exceed the natural grazing resources of these areas The result is that severe erosion of the mountainsides is a characteristic feature of most parts of Greece. 24. Agricultural practices are not at an advanced level although they have improved greatly since 1950. The use of fertilizers and other agri- cultural chemicals has expanded relatively rapidly, new crops have been introduced., there has been some substitution of capital for labor especial- Ly in iriechanization in the cereal growing areas, and some departure is evident from the more traditional practices. Stimulating such changes are the ideas associated with the introduction of irrigation and the prospect of expanded farm incomes. The benefits of some of the postwar irrigation and land reclamation works are being felt in this way. There is, however, some 85%-9Q% of the cultivated land which is not irrigated and there is still plenty of room for further improvement in agricultural practices, especially in regard to fertilizer use and the selection of suitable varie- ties of crops and strains of livestock. 25. Livestock production is underdevelopedand little progress has been made in improving the strains of stock or production methods. There is an acute shortage of livestock feed. Indigenous grazing is poor and re- stricted to land not suited to cultivation, and at present prices for -7- livestock products and fodder crops are not competitive with most cash crops. l"oa-1hl to meet Un dem and for, m-eat and c-air, ~ro,o V cially beef and cow milk products, imports are expanding and becoming an adaptation of agriculture. Agriculture is made up of a very large number o L famasi wLU-*c ar iot~ ona.l y Sialdl £in siZCt: LUiLLL~L ±rdIJ"iri"bt A. 1 CL result of a major agrarian reform in the 1920's, ownership of the land by the farm operator is the rule. However, as recently as 1y; there was _Lg- islation providing for further redistribution of agricultural land. There are about 1 million agricultural holdings, with an average size o 3. nec- tares. It is estimated that some 85, of all holdings are seriously fragmented: the average number of plots is seven and the average dispersion is about 2-1/2 kms. But the variation is considerable, and under existing Greek law there is nothing to prevent the further subdivision of land when it is snared be- tween relatives on inheritance. The pattern and organization of farming which is dictated by this factor seriously impede development. Moreover, very little has been or is being done to ameliorate the position. In some cases recent official policies have worked in the other direction and offset what little progress is being made towards consolidation of holdings, in spite of provisions for compulsory consolidation of 1arms newly affected by irrigation schemes. 27. There are a variety of arrangerients for the sale and handling of most products, but in general the marketing is weak and inefficient and is one of the major inadequacies. Because of the important contribution made by agriculture to the export economy, there is the need for a much more vigorous approach to the problems of market development, the provision of adequate marketing arrangements, and the need to match production to the requirements of export markets for fruit and vegetables in Northern Europe. however, these can be realized only if satisfactory marketing arrangements, especially standardization and control of quality, and Droduction which is efficient enough to meet competition from neighboring Mediterranean and other countries are achieved. 28. The third factor affecting the rate of development is the oper- ational efficiency of the main agricultural institutions. Biological and economic research is verv limited and inadequate for the needs of a sector of this size. Advisory work is thinly spread over the large population of farmers and annears. to some extent at least. to be concprnp.d in regulatory and adainistrative functions. Equally, there is a severe shortage of technically trained nersonnel below universitv 1Pvel for emnlyment in various agricultural services. The cooperative movement is highly splin- t.PrPd andr loaie nd oocnta~ n agriculturaI cT-rdit. There na more than 7,000 local cooperatives with a membership of approximately three- mqa+.rte r of amillion- In all, = hnxrn nq +1,; mp4_ vision of agricultural credit. Because of their smallness, regional unions of copeativs, i some UZnoit spcaiain, wereU estab.-lied andc- there are 131 of these unions throughout the country and 851 of the total cooperative unions. - 8 - 29. Agricultural credit is provided exclusively by the state financed institution, the Agricultural Bank, which is a ionolithic institution whose policies are largely dictate by political considerations mostly in respect of supporting farm incomes . The cooperative movement plays a pivotal role in the determination of these policies. The Agricultural Bank is currently responsible for loans of about Dr 8 billion per annum but total loans outstanding have been growing at about 10% per annum. Approximately two-thirds of the loans are seasonal loans for crop production: the basis for these loans is weak and relatively indiscriminate, being set nationally at standard rates per crop area regardless of locality, size or rofita- bility of the farm. There are also a wide variety of other types of loans, for different Durposes. at differine interest rates and for differin- periods. Although lending for longer term has been expanding, both medium.- and long-term loans only account for about one-third of bank business. 30. Interest rates have been bronght down substantiali in the last decade. From being relatively expensive, agriculture credit is now com- naratively chaP For instane. cultivation loans are now chaend at and longer-term loans are cheaper. The Agricultural Bank, for its part, ,.n-11V n -rn-n n-F in.-r.+ -r +P fAY' i+.q MtVIAIT Ahr-vm+. I-nlf~ i-q _~~,r'~ (this proportion has been declining annually) come from the Bank of Greece der of its funds a variety of interest rates, up to 5%, are paid. The re- pantrnn -renco-d of. fe r s =sAd coorarcvn- t c -; C', 1V 1, , 11f-,; 1 - +-1,4 , -n flects the low income position of farmers, continuation of the credit are dictated by social objectives. As much as one-third of the sums fall- .r,%UIZ CLLl JyUC.L d..L iLIVU I JCI.LU. LVcuis whLich~1 ar ad.Luy UVt-Luut: CtUU.L-CL4; much higher interest rates and repayment of these amounts to about 90% by Utle en%A . eachL year. Because o -U LIU iUULIL.IIg Zj,14t U.s. U&L. UUUM.5 I1I. certain areas, especially in mountain areas, the present government has declared a moratoritum on certain debts and contributed -r 170 million In 1964 to the Agricultural Bank's deficit on this score. A further Dr 200 million has been provided for the same purpose in the l96 budget. 31. Une lunction of the bank, exercised also in conjunction wiun ne cooperative movement, is concerned with agricultural development and some of its funds are allocated specifically for this purpose. The general direction of this lending is for the development of agricultural processing industries, usually through the agency of various cooperative unions. Not only are these resources not fully utilized but it is doubtful whether the capital that is invested is always put to best use. 1/ This excludes, of course, borrowing from such private sources as other members of the family and money lenders. -9- 32. In all, the institutions concerned with agriculture are not yet adapted to the needs of changing agricultural economy. There is wide- spread diffusion of activity in all respects on behalf of agriculture. Progress is therefore inevitably slow because of the failure to concentrate on those developments which are economically the most worthwhile. 33. Government policies towards agriculture account for a large amount of expenditure both on capital account and current account. Agri- culture receives about 30% of total public investment. Over 70% of this ex- penditure was directed towards the reclamation and improvement of land. Ex- penditure on marketing arrangements, at about 5%, was roughly the same as that for research and education, while forestry and antierosion projects ac- counted for slightly more than 10%. 3L. The ratio of spending on current account to capital account (ex- cluding the costs of administration and extension work) fluctuates but it approaches 1:1. There are numerous schemes to stimulate certain lines of production, or marketing. which are in effect income supports. And the re- sult is that, in general, prices received by the producers are not competi- tive in terms of international nrices. Morpover- there is a substantial measure of additional protection for agriculture from the high tariffs imnArd nnoricultural nroduct. 'A< Alrnf fha~ PIIT-ent ar1 icluralI isse cz11s ; th questp Io+n of' weatp production. I-heat production expanded rapidly in the 1950's in response to land is now under wheat and, following a bumper harvest, there is currently UYn ar lo of0r~ alms . ~o + ne-th-d, wnrr do-tc n-n.4reme"U An-e Pw^- +r In- increase in acreage, yields of wheat have increased considerably as a result of better pratic-s Jn particul0- by the -14-Jo 4 of+ fea' 'r+4 14e m's,Ad the use of higher yielding varieties. The yield of about 600 kgs. per acre Is 0JLs L 9 i, be-.low 41,LICLt.. .11 ..LjCJ.y C.) UI U ULJtjLUIU.LO.L.L.LX b~LU low O.~ IA ± if~J mos o. UJ.A European countries. 36. Because of the high price of wheat, farmers are reluctant to .L U LA tivL 'VLIUI PIV%AUk.:L40, r OPUUJa.L0.L O LU .D WU,~ VIIV O.LI_Z VJ.L has become widely mechanized and is relatively easy to cope with. At the same time, theI area",C Under.L fodder' gr Ins O has LIt; decine in M the IO past l tnyears and there is a large and growing deficit in relation to domestic require- ments. it is to be expected that, as the size of the livestock population expands, the imports of feed grains will add further to the import bill. Ie wneat problem is sharpened because the current wheaT price at $oo.6 per tonl/, high though it is in relation to "world" prices, is well below the newly agreed EEC harmonization price of $106.25 per ton. In the dry f arm- ing areas there are no crops which can compete with wheat in terms of profitability and ease of production. This is not necessarily the case now- ever on irrigated land where wheat is still produced. There, the likelihood is that production will have to be discouraged if any progress is going to be made in adapting the agricultural system to the requirements of general economic development. 1/ This price relates to areas of more than 25 acres. The prices for less than 10 acres and 10-25 acres are $100 per ton and $93.3 per ton respectively. - 10 - 37. Irrigation of land offers considerable scope for improving the area under cultivation. In all, about 1 million hectares of land can be irrigated in addition to roughly half million hectares which are at present irrigated. Existing policies however have the effect of retard- ing what could be achieved more rapidly if the effort were to be concen- trated: the limited funds available for investment are spread widely between separate projects, and the problems of development of new high- output systems for making best use of the irrigated areas including re- forms such as marketing arrangements, land consolidation and increasing the size of farms, do not get the attention they deserve. 38. Forests account for about 20% of the total land area of 13.8 million hectares. Although the Government has comprehensive plans for forest management, particularly conservation, funds are lacking to counter the destruction of forests by livestock and erosion. Employment in forestry accounts for well under 1% of the workin;z population. Exports are limited to resins which appear to be facing a declining market, while imorts of timber and forest products are expanding each year. Fishing 39. Althongh fishing is widesnread around the coast of the mainland and islands, it is relatively unimportant as an industry and 80% of its outnut. is derivp d from inshorL fishing. Tt Pimounts for rather tss th-n 1% of the working population and exports are negligible. Industry 40. Progress of industry was slow for a long time with agriculture Y,sd, red -1nt J-n Gr_ek.rr ecno-nMyr T-A,,c+t.vI rvn4r -n4n -l ~+ - income increased during the interwar period from less than 10% to appro,zi- j-W .9, *.L 6 . V JJl JLJ. .J A V,UZAL of 6% to 7% since 195, slightly faster than GDP. At the beginning of the mechanical engineering, basic metallurgy and chemicals have expanded rapid- ly, aCconig for about halfAV.JL of the gryt in inutra otu. 11owever tz,. almost half of manufacturing production is contributed by the main three tAditiona laU ndustrie ofL .1UVU, UV.l-V WUu baucco. c . According to the census vJ LI,u and the .Inuustrial survey of 1lV9, 98% of the establishments accounting for 6L% of total employment in manu- facturing contributed unLy 44/b of totaL vaLue aUe of manufacturing outpuT. Although a large part of the contribution to national income is still pro- Uuced Uy smajl and ine1xcLent units, the trend towards a more efficient production and greater productivity is evidenced by the fact that,while industrial output is rising, employment has hardly changed in the last decade. Furthermore, a speeding up of the transformation in the structure of manufacturing is likely to follow from the establishment of additional shipyards, oil refining, steel and fertilizer, petrochemical and aluminum plants, all of which are under construction or planned. - 11 43. Tne uovernment attacnes cons derdvbe importance to an acceleratea growth of industrial production in view of the pressing employment problem. However, for a long period private Investment in industry e1fe short of ex- pectations, viewed especially against the various incentives offered and the more favorable climate reflected in the banking system resuming gradual- ly its normal function in the provision of finance. Furthermore, Greek manufacturing has traditionally been highly protected. The gradual elimi- nation of present tariff rates, often as high as 50% and more ad valorem for competing products imported from the Common Iarket, and the adoption of the common tariff is likely in the long term to affect the composition and prices of domestic and imported manufactured goods in the home market. 44. A number of measures have been adopted to eliminate the various shortcomings in the industrial development and, by varying the respective benefits, an attempt is made at the same time to influence the regional location of industry. Fiscal benefits in the form of tax rebates and generous depreciation allowances, long-term credit facilities at low inter- est rates and technical assistance by the Hellenic Industrial Development Bank are available to private firms carrying out new investments. Guarantees for direct investments by foreign firms have been provided since 1953. 45. The cumulative effect of all these incentives to investment is only slowly beginning to make itself felt in an expansion of industrial investment. Capital formation in manufacturing was about 10% of the total in 1961-63. However, direct foreign investments in industrial undertakings have increased recently and their impact is also felt in the promotion of modern entrepreneurship in Greece. In addition, investment is likely to be speeded uo as an increasin- number of businessmen oreDare for their country's association with the Common Market. The prime obstacle to a higher level of industrial investment seems to h vrivernmnntal in thp form of a multAiud of uncoordinated and often contradictory measures regulating investment which have accumulated over a long nprind of timp- Tt i.s reconnized that the current system of licenses and controls needs overhauling and legislative mesrsfothi+s~ -11pupose have beenpraed Mi ninry Pofn-rc- LWrlrlc r- TT run-ri r IA nnO nPn-n1p we-re taage in, rnininu The severe setback by the war and the civil war made an extensive rehabili- subsequently increased considerably, bauxite, lignite, magnesite and iron rvur,+o ha4mn +he m + mo mt-1- + -+ '45 I - _"AVe UAI ..LL LA =%,L1LJ ~ UL_L.J.. %A L..LA1U% P&LOLV.J C.L A± L z"j C..~ U I'LL the previous peak figure was exceeded only in 1963. In 1961 there were J 1 £J.A1tI, AJm Lt olf. ttjhVelm pr. Livte-1y oJwned. kj.4146J~ anL d.J -ZU-L- ~ now~ L.account for about 1.5% of GDP and employ about 22,000 persons. In recent years, g L 'J iA U.S.£LLi.1 .I jd. y.L WL L LIfZ:' L VI L)U ULi ±L d_U.1iLL11LU ctiU a nickel plant are under construction, and projects for mining iron ore and zinc are being studied. The Government has planned a major geological survey over the next four years at the cost of about $15 million to evaluate systematically mineral anu Ql deposit and water resources. - 12 - Tourism 48. Growth of tourism in the recent past has exceeded all expectations, and still offers substantial possibilities. given the historical and scenic attractions. Despite a setback in 1964 due to the Cyprus crisis, there are many indications that the boomina state of the Greek tourist industry is increasingly attracting foreign investors. A large number of privately owned hotels art btincr built and thn Mational Tourist Oranization Pnvisarres ,1q million of investment expenditure in 1965 on hotels and tourist attractions. Power 49. Power consumption in Greece nearly quadrupled during 1956-64 and hydroelectric power potential, thermal power accounts for about 70% of total duA,+ ,r nn4 frn nn c ti,i or n,, A -+ -P--- 7.1"4^1 nb rnn",+_ nrv. r ^y. their own use, all electric power generation is undertaken by the state- 1964 is only about 380 kwh. About half of power sold is consumed by indus- tries, about r2U1 dVfOmestically, andU aL LULItle oVer 1%P byJ aIc_ULUe. TI" structure of power consumption is projected to undergo changes (about two- tLIrU of production lKely to be uumuIU Uy inuuUtries, less tan one- fourth by households and less than 1% by agriculture) by 1968 when total power consumption is expected to be about 6.6 million kwh. Tariffs Nave not been changed since 1955 and vary between Dr 0.2 and Dr 1.9 per kwh, depend- ing on the quantity consumed and the purpose. 51. To anticipate the growth in consumption, ruL envisages a total investment of Dr 11 billion over 1965-68 to double the installed capacity from 813 mw to 1,629 mw. Approximately half of this amount is to be spent on generation, one-third on distribution and about one-sixth on transmission. The PPC plans to finance Dr 3.3 billion of the proposed investment from ].ts own resources and so far external finance totalling Dr 2 billion has been arranged. The balance, for which financing has yet to be arranged, has been divided by the Corporation into Dr 4 billion of local expenditure and about Dr 1.7 billion of external expenditure. The construction of the Kremasta and Kastraki hydroelectric stations during this period should by 1968 raise the capacity of hydroelectric power stations above that of thermal stations. Transport 52. Transport conditions in Greece show a number of particular features. Much of its international trade is waterborne. It is both geographically and, to some extent, politically isolated from its neighboring countries in the north and east, although road and rail connections have been re-established with Yugoslavia, and are in the process of being re-established with Bulgaria. East-West domestic land traffic across the mountains being difficult, the main transport arteries of both the rail and road systems run south-north along the eastern coast. Along the .est coast, transport conditions are much less favorable. The numerous islands and long coastline, with hundreds cf small ports. make waterborne transnort imnortant for fomsti t.r ffic - 13 - system. The railways were originally built as parts of a much larger rather than economic considerations. Finally, World War II and the Iollowing civil war leLt Ue bransport sysem Ulrge.Ly destrUydU. AL- though much has been accomplished since the early fifties, much remains to be done to provide the country WTn a mouern ral and roadu ystem, port problems being of less importance. So far the process has been largely one of gradual repair along existing lines rather than applying improved standards. 5h. At present the transport system is not a serious bottleneck for economic growth; land traffic is still relatively light. There is no present need for accommodating large quantities of bulk traffic like minerals; and, although agriculture (usually calling for large traffic volumes) is the most important economic activity, it does not appear to put a very heavy burden on the roads and railways. Agricultural exports need to travel only relatively short distances to reach a port or collect- ing centers for road haulage, and arrangements for the latter are one of the better developed sides of the transport industry. Low farm incomes and some degree of regional self-sufficiency in agriculture limit both transport volumes and distances. With respect to rural and "first stop" transport, mule and donkey are still widely used, and an important role is also played by the numerous farm tractors which can haul products over otherwise impassable roads. Notwithstanding difficult transport conditions, rates and fares for both goods and passenger traffic are not unduly high. 55. This picture is likely to change as industry and production of cash crops,,mainly for export,expand and the livestock industry develops with a higher degree of regional interdependence,both for supplies of livestock and feed and for transport of fat animals and meat. The rail- ways occasionally have to refuse traffic because of shortage of equipment, and the low standards of many road sections will soon be insufficient to accommodate growing traffic. Domestic waterborne goods traffic and rail freight traffic have grown annually by 60 and 5% respectively since 1958, about in line with the 6% annual growth of GDP over the last decade. How- ever, total traffic has increased considerably more, as is common in coun- tries in the stage of develonment as Greece, and as usual the excess has been taken up by road transport. There are no statistics of goods hauled by rncld hut thp total number of trucks has inertaspd by l-, annually since 1958 and the loading capacity per truck has grown as well. Passenger +rnffin h h s nnfi rAil nnmhinpti hqs ornim by () in niumhr nnrl 86% in passenger km, although the population has risen by less than 1% per annum. 56. Central government investment in transportation amounted to Sl4" +li lacz +1hin nT-ird nnf th_ +fM-+.nf nvrH+mon+. hiieaaf. nvpr -lp l+. five years. Approximately 75% of it was for roads and about 11% for rail- ways. Wok wich was recentl_ tredojh prpaato ofln ---r transport investment program, is likely to meet many difficulties. Collect- rece ntly -4i v A hary+4 a4__ s4is 4 f" xtrA +tine+ .n M+reve+r nnli, ...A . _A U.A " V6 J W V Aiw V 1- - V- . 1 _ recently, giving hardly a basis for extrapolating past trends. Moreover, L.e a s o.. L.1 Wi 0 UC LUV VL I L.. L ~LLLw LI1d.LY . OI, UCI U V o oLOUIL _L .L L u L LJ. U, T.le war, .L a dcuse of th[e eJ.L.Lect of 0.ew Jdevlpmns s~Vj1A1U~j~uI~ch ation with the Common Market and establishment of new industries, past transport trenda may not form a reliable basis for fLuturepani. 57. Approximately 4 m. is spent per annum for tne physical improve- ment of the railways. However, the allocation of funds does not take place within a systematic rehabilitation program. A thorough study of the railways is urgently needed to arrive at a sound rehabilitation program, investigating such problems as upgrading the track to 20-ton axle load, improvements and additions of rolling stock and workshops. A more concentrated program, with increased efficiency of management, closing very low traffic lines and possibly some rate adjustments after the accounts are rationalized, might even remove the annual railway deficit altogether within a short period of time. The railways operating deficit--with an operating ratio of 160--reached about Dr 450 million in recent years. $8. The inistry of Public Works estimates that an amount of approxi- mately Dr 25 billion (U.S. $835 million equivalent) would be needed to bring the 8,000 km National Highways up to proper standards, and an amount of about twice that size for the 31,000 km provincial network. At the 1964 rate of road investment of about Dr 1.5 billion (excluding maintenance). it would take 50 years to accomplish this goal. Greater annual investment is likely to be needed in any case if road improvement is to keep pace with increasing road traffic,and tax revenue from road users (amounting to rough- lv Dr 3 billion in 1964 or twice the expenditures on roads for that year) is rapidly increasing. 59. In general it would appear that the need for investment in ports is not great. Capacity is amole, though in some cases increasing of depth is desirable. The two largest ports--Piraeus and Salonika--being largely financially self-sufficient, need no or little financial help from the central governnent investment budget, at least for the time being. The length of quay wall available or under construction in these two ports should be ample for several years, provided the efficient use thereof is increased by imnroved cargo handlinp onerations- Tn Pirans and Salonika less than 500 tons are handled per meter quay wall per year, a low figure comnared with 1-20 tons fnr 'hoth the Yianqlavian Pnt.rnt in Snlonika ann Volos. Traffic in the latter port is growing fast, and extensions of both infrast+ruc-tunre anr nt.hpr fneriJ1+Jq nrp roqnii-ti. ' soldb given to creating in this port, and maybe in some other ports as well, a Salonika. It would seem advantageous to concentrate development efforts major, middle size and minor, the latter group to serve fishing and tourism - 15 - 60. In the transport sector, especially for roads and railways, the need for proper planning is urgent. Funds are at present spread too wide- ly over many small projects which take years to be completed. In ad- dition, investment possibilities for transportation should be settled for priority against other investment claims. PUBLIC FINANCE 61. The Government iq mirrPntlv nrenaring a five-vear n1an to face its long-term tasks. However, this work is still in a preliminary sta:,e, and the main in.t+.rmen . nf Pnnnrnomin ne-lIie-v i. qtill the annual budget. Though both current expenditure and revenue have risen rapidly in the last few, yrs,r u variiusn- nyac -r n hav affected t +hea sze of the1 nove-"nl I d nf 1 n it. CENTRAL GOVERNMENT BUDGE 1958 1960 1961 1962 1963 1961a/ 1965:' Current expenditure 13.2 14.9 16.7 18.0 20.0 24.0 27.7 Investment expenditure 2.6 h.1 .1 5.9 5.0 5.2 6.5 Tot,l 1.8 19.0 21.8 219 21.0 29.2 3),2 Receipts 1L7 16J 18.9 20.7 91-Q 9(K1 90-7 of which: current surplus (evel MATnlcnnibution) 07 0.3 0 9 1.5 1 0.7 0.3 Overall deficit 1.I . . . . . . Financed by: Foreign sources 0.7 1. 5 1.8 1 .6 0. 1 1 3.1 Internal borrowing 0.4 1.1 1.1 1.6 3.0 1.8 1.4 b/ Budget. Source: Ministry of Coordination 62. As recently as 1955, the deficit in the current budget was still comparatively large (about Dr 1,000 million). From 1955 to 1960 current re- ceipts increased by an average of 9% per year and expenditure by only 6%. The slower increase in expenditure was largely due to the fact that earthquake re- lief exnenditure came to an end and defense expenditure (representing 155 of total current expenditure in 1960) increased by only 310 per year during this neriod. In 1957 for the first time since the war there was a surolus from the current budget (Dr.200 million) and by 1963 this surplus had risen to Dr. 1.8 billion (including NATO contribution).8c" of current aovernient revenue. This improvement in the current budget situation w.;as accompanied by rising investrent - 16 - expendUiture W11LLULI I'L.RLU LU )- L..LLLJ_1 L11 _L7UC LUu4JydvreU iiiO Ur_c billion in 1957. In 1963 and 1964 an accelerated rise of expenditure for variouS iteM in the currenl buUget resueu in the large overall delicli of Dr 3.1 billion, although lack of ability to implement planned invest- ments prevented a still further rise. 03. Arrangements for financing overall deficits nave distinctly improved. Up to 1957 the Government had practically no means of covering the deficit other than central bank lending and foreign aid. During l902-o4, however, the state was able to cover almost 40% of the overall deficit in- ternally. The balance was made up by foreign loans and grants. The Current Budget 64. Current expenditures of the central government in 1964 of Dr 25.2 billion were almost double the figure of 1958 (Dr 13.2 billion). The annual increase ha-is been particularly pronounced in the most recent past, rising from an average of 6% to 71 in the years 198 to 1962,which was roughly in line with the growth of gross domestic product, to 11% in 1963 and 26% in 1964. 65. A major factor has been a long over-due increase in the remuner- ation of civil servants affecting this item in the budget by an increase of 16% in 1963 and 23% in 1964. In addition various subsidies, mainly in favor of agriculture, almost doubled in 1963 and went up by another 41% in 1964. Rescheduling of payments on old debts of farmers and price supports through the Consumer Goods Account for a bumper wheat crop have been of predominant influence. Furthermore, expenditures for social welfare and health continued to increase at a rapid pace (around 25% in 1963 and 1964). Indications are that this "social" approach in spending policies of the new Government will continue to be reflected in a sharp rise of current government expenditures. Government Revenue 66. The tax-income ratio has been increasing in recent years, and. it is estimated at 17% in 1963. However, current revenues have not kept pace with the accelerated increase in current expenditures, whereas earlier they tended to grow somewhat faster than expenditures. Current budget receints from domestic sources in 1961 were 9 and in 1961 121 above the level of the previous year. The major part of the increase in current revenue in recent years came from indirect taxes. The Greek fiscl qvtxm relies heavily on this form of collection; indirect taxes now account for about 80 of tax revenue. 67- Ficlnf'Tm f 19<3: ant 1 Q'Q i-n+.rfiini _q q-xM+_of A-proge sive, single tax on income, with many exemptions, virtually excluding fnrmPrq ,mmll nr+virl ^nveT-n eanf'+cmmvn fPar^m +h numon+ P - taxes. Since then, the tax rates have been lowered, basic allowances have beenfincresimane ver st,zst Atiularl n t c e o .re beens and to firms to stimulate investment, particularly in export indus tries and to &'J 11~ V1L1 U,..J.G. ~Avers. .L~j Al UL .4LU LLO .L.Y* VV.Lh L,I L M. 0t: M LIL U.LUD, - 17 - yields from taxes on personal incomes remained low, providing in 1964 about 17.5' of current revenue from domestic sources, the same percentage as in 1959. In both years the corresponding percentage for corporate taxes was less than 2%. 68. Although tax rates are not excessive, especially after the last income tax cuts at the beginning of 1964, efforts to improve the machinery for assessing and collecting taxes in order to prevent tax evasion have still to show convincing results. Another important aspect is the limited effectiveness of tax incentives if accompanied by extensive tax evasion. 69. Indirect taxation has traditionally provided the bulk of state revenue. In 1964 its share was 70% of total current budgetary receipts and 80% of total taxation. Almost one-half of all indirect taxes came from customs tariffs and other levies on imports. The other half stems from impositions on domestically produced goods, services and transactions. The outstanding items in this group are taxes on tobacco, and alcoholic bever- ages, stamp duties. and turnover tax on gross receipts of industry and services. 70. The rate of growth of indirect tax collections has outstripped the growth rate of eross domestic nroduct in recent years. largely due to increased taxes on consumer goods, and also to the introduction of special taxes levied on some luxury nrodiuts and serices. Frecnient increases in indirect taxation have made an important contribution towards monetary stabilit bynhecking st.rongr asinryenece in cnupin counterbalancing to some extent the lack of the income elasticity effect of d-i rpn. +nYqHnn,- start was made for a substantial growth of central government investments. P +,,m +n +M A +^ ~ ~ !-4 l -' _ T. 'k-. 1- Drp-, ..-v^ Inn -F _ 1 O to 1962, to a peak of Dr 5.85 billion in 1962, compared to Dr 2.6 billion in 19q M[ove i"ve%mecnt ovr%ond4no li-Trn hv Cot En shnlni+ T)-1 C ~11 -_ -11-ditues -~cie b! 1,O r e~~+Ty .0 billion in 1963, and according to preliminary estimates a relatively small visages Dr 6.0 billion to Dr 6.5 billion of investment spending. 72. Of the public investment expenditures in the period 1957-63, ~J.VJ UI U LA~ WJ~..L L WLA.L U±LJU U 4J.Z i) Q%e'.L.LU_tU.Lr_ kr_UAjoJ industry, including power and mining (27%), and transport and cofiuni- cations (2%)./O Th1e re-MaCinde-r was shbared 'by variLOuspbi tlt rjc tourism and education. In the last two years, notable shifts have taken place. Due to the trasfer of power inve_ments to the PC and the -e-.enic Industrial Development Bank taking over the role of fostering industry and mining, the share of the industry sector in central government investment expenditures declined to 14% in 1963 and to about 8% in 1964. The corre- sponding figure for agriculture was 30u in 1963 and about 27 in 1964. - 18 - Transport and communication absorbed 327 in both years and investment expenditures for education increased steeply to 5% in 1963 and about 9% in 1964. 73. Various factors have led to the drop in public investment in 1963 and the subsequent rather sluggish pickup. It appears that increased public outlays for an expanded investment program were hardly limited by the need to preserve monetary stability. The lack of leadership and entre- preneurship and a public administration not smoothly and efficiently functioning in many sections have limited the capacity to implement projects. The absence of clear priorities and often inadequate preparation of projectc has led to many projects being started with little prospect of completion within a reasonable period of time. The backlog of projects at the begin- ning of 1965 is estimated to be more than Dr 42 billion, of which Dr 23 billion represent future expenditure on projects already started. Financing of Government Investment 74. In the early fifties foreign aid was the only source of finance for government investment. Since 1957 current budget surpluses and reve- nue from previous investment covered roughly one-third of government in- vestment expenditures. The high contribution of 47% in 1963 was partly due to a higher current surplus estimated at Dr 1,800 million (including NATO contribution) and a fall of investmPnt exnenditure. 75 HoweveiTiTr- graduaIlv +hp. nh,-nk nn inflt.in qrad t.he- in(-r(-a'.qPd fIow of savings to the banking system made borrowing in the domestic market ile The an of treaury ills ws the main instrument in tanning private savings in the late fifties. More recently, a market has been re- bearing treasury bills sold to the commercial banks, holding them instead rif I vr r +-rm i nriiiqf-i n1 f-rA c '74 14744-1, +1- -P , 4,.,4- 4-1-~ - -+ TT q I '- "J.L ""t ULhI .."lY.I 16 V'4 .L- -S -h&. -.VLJ Uti i i L. -S . l rs, -' -.' a t - aid has been replaced by official and private loans as the main source of e~~''afuds he AhnTrayassociating -reec- ih-h-urpa Economic Community provides for loans totalling $125 million to be made to ~77 Arrneet o iacn DL 4' . Q,41!--4A--.1A-- -- -4 yet complete. Assuming investment of Dr 6000-6500 million and government Dr 1,000 million and a current budget surplus of Dr 1,000 million) a finan- -P~4 nh 00 0 . ... nnn- .if % -I-IMl- - -~ - .2 . -3 ci1 JJg p .L VLr 4 u V 4 .) III.L..VI Vzifc110 . ILMe c1U(LLU1-.LUJt--j UV JJU , t:;Z.PVk;U to disburse more than Dr 1,200 million from external loans already arranged and are seeking additional- forig fiacn of som Dr 1,00-1,0 mil-- ion. The Role of rublic Agencles 78. A number of state enterprises have been established in Greece, most of them in the postwar period. It is widely believed that the Govern- ment has to play an active role in the economy if development is to be - 19 - stimulated. Public enterprises are operating in transport (Greek state railways, port authorities in Piraeus and Salonika), telecommunications and electricity (Public Power Corporation), and also in agriculture, manufacturing, tourism and banking. 79. The Agricultural Bank of Greece, the National Tourist Organi- zation, and the Hellenic Industrial Development Bank are designed to function as development agencies. Other government undertakings, like oil refining, manufacturing of fertilizers and sugar were conceived to form nuclei of first industries around which other industries are ex- pected to develop subsequently. A rough estimate suggests that public enterprises have contributed about 8% to gross national product in re- cent years. Investment outside the government investment budget amounted to about Dr 3,100 m. in 1964, compared to Dr 2,700 ri. in 1961. So far, only the Public Power Corporation has been able to borrow funds from the domestic capital market, and public enterprises rely heavily on funds from the investment budget supplemented by external finance. The Agri- cultural Bank has acquired the bulk of its funds through borrowing from the central bank, although to a lesser extent in recent years. With the exception of the railways, public enterprises mostly cover their oper- ating costs, and provide for depreciation and build up reserve funds. They are not required to pay interest or dividends on the major part of their capital. MONEWY AMf CREDIT In the late .rties and at the bgi"nnig o the ment expenditure was largely financed by the issue of new bank notes. At ~~~~ v- VW t.U.'t. J._LU ~J~L~Z L~~J. .L1 .LG o c'.u' %J. L .LU sovereigns by the Bank of Greece and, subsequently, severe restrictions drachma in 1953 provided the basis for the stabilization of the economy L V L l u L -L-L "UO. nO %I 1 L.LU J U t iL Wt toL1 1t;W iu . Y wct±_, I-Vo U~ t1VLt: LI credit institutions progressively resumed their normal role of financing U+ A.Li cen,raw,r rP1 t .L -fr AX-, J.A LA L nA L pAUoW1nL16 UI iUi- =. policy is held by the Currency Committee, set up in 1951. Its members are the Lnisters of CoordInation, Agriculture, Commerce, Finance, and 1naustry and the Governor of the Bank of Greece providing the secretariat. Its main functionS are to control the volume and price of credit and its allocation to the various sectors of the economy, and to determine government expendi- ture, foreign exchange policy and open market policy in the gold market. The powers of the Currency Committee are far-reaching since there is no pre- established legal framework limiting monetary action, such as minimum or maximum reserve requirements, ceilings on state borrowing or minimum gold backing for note circulation. 82. During the first few years after the devaluation of the drachma in 1953, the credit market operated under a system of tight and very de- tailed controls. From 1956, with the stability of the price level reasonably - 20 - assurea, aeposits witn tne oacing system rose rapidly, credit controlS were progressively relaxed, and the commercial banks were allowed some autonomy in their operations. A tmird stage in the return to normal was reached after 1958, when the continued growth of deposits eased the pressure on the banks and interest rates for both creditors and debtors were reduced towards levels prevailing in industrial Europe. At the same time, the capital marKet started to gain a certain attraction for savings. The most recent major liberalizing step forward was made in September 1963, when new regulations were introduced, prescribing the banks oper.- ations in a more general way and abolishing many detailed controls. Growth of Credits Extended by the Banking System 83. Credits extended by the banking system have more than doubled since 1959 and reached more than Dr 50 billion in October 1964. Their growth has accelerated substantially in the recent past. Whereas they averaged about 15% per year in 1959-62, it went up to 17% in 1962 and 20% in 1963. In October 1964, total outstanding credits were about 16% above the level a year ago. The largest part has been absorbed by the private sector, al- though increased government activities in furthering economic growth re- sulted in a. more rapid rise of borrowing by public undertakings. CREDITS OUTSTANDING BY SECTORS (billion drachmas) End of Period October 195b 1960 1962 196b Agriculture 4.5 8.2 9.9 11.6 Hanufacturinr 5.3 10.9 11.2 18.8 Trade 2.7 4.3 6.1 9.1 Hous ing q 1.1 1.8 2. 5 Other private sector 1.0 1.8 2.4 3.6 Public entities and enterprises 0.6 2.2 3.4 5.1 Total Th. 28-7 37.8 40.7 Source: Bank of Greece flected largely movements in the consumer goods account, recording sales and purhases o aiu ~eurnedar,u+,1pou trading losses are financed by the current budget, and loans from the risen from Dr 3,550 million at the end of 1960 to nearly Dr 6,000 million .LI1 11-ovel1L'Ir -L;IU4. UL -L,UVVJ 111.L.L_L.LUL1 U. L th i iceas *0k plCaCve .in, 1965J4 u-I to a bumper wheat crop. In addition, the amount of' treasury bills held by ti-le commercial vais uouvleu during Uy-y- - du 1 tue Lirbs tnD, MIontU Of 1964 another increase by Dr 700 million to Dr 3,800 million took place. - 21 - 85. Credits to public entities and state enterprises have increased rapidly in recent years. They have more than doubled since 1960 and ac- counted, with Dr 5.1 billion, for 100 of total outstanding credits at the end of October 1964, compared to 8% and 4% at the end of 1960 and 1956 respectively. 86. Within the private sector, an accelerated increase took place in the financing of industry, by far the most important single item of outstanding credits, amounting to Dr 18.8 billion in October 1964. The rates of increase have been 181 for the twelve months ending with October 1964 and for the year 1963, 160 in 1962 and 11% in 1961, outstanding credits having doubled during 1956-60. In view of the limited efficiency of the capital market and the growing needs of industry for long-term credit, the monetary authorities attempted to channel bank funds to lonR- term loans for fixed investments by requiring commercial banks to use 15 of their deoosits for such loans. Undisbursed amounts have to be deposited with the Bank of Greece at a penalty interest rate in order to enforce the measure. As a result long-term loans. as a proDortion of total loans to industry, rose from less than 1% in 1957 to 18% in 1963. 87. Contrasting with these developments, the growth of credits to agriculture has slowed dun rPmirkh1v. At. +.h And f 1 QI- thp- filure was Dr 10,760 million, 8% above a year earlier, having risen at about the same rate as in 1962. This enmnan with an aver_ne annil int-rPn !Pf qhnt 12;j in 1959-61 and about 20% in 1956-58. The Agricultural Bank as well as the. Nat ni M_tga v __ 1-- on th14-ched and xmc svluino Ce_Vd organizations for their respective fields. Both of them, however, have been prevented by various factors from pefrigterrl ncnomLTr with free market forces. The activities of the Agricultural Bank are tied to a l a extoent +- ,~ - 4+4-ntl1- A-~4p-m4-,A '.,.,n -1 +-nj n 4nl m the policies of the Cooperatives and the Mortgage Bank is almost exclusive- vu. Luy kA.LL1t. UL p u' mU ncy _L v LIUUO.L116. Tuuue u. at - veaeinua at f UU. JALA oUjUP.L'Y V.L ml u'Ay .L%'.LVCLQU CLL, Cul CVV.LO UVLLAV.L V %,i .J. JV.. 22% in the five years 1951-55, and at 16% in the eight years 1956-63. De- O-J.t,U V.LM; OUL.L.J. L.Lrt:; ..JLL~..41 ULU .LUtA-.L JJ.L.L.U$ C1 1W1LC1.12.UJ Ut&U:U monetary stability was achieved, the growth in deposits reflecting the re uruXugI cufu n urency. -owever, tne money supply increaseu much more rapidly in the recent past and was, in November 1964, 20% above the level a year ago, the major responible factor being snort-term financ- ing by the central government of public investment in 1962 and 1963, and ncreauedu payments to farmers througU Ue con5umer goods account in -96ol. - 22 - MONEY SUPPLY AND SOURCES OF CREDIT (billion drachmas) End of Period October 1956 1960 1962 1964 Money supply 8.7 15.5 20.5 27.1 Total credits 14.6 28.7 37.8 50.7 From: Bank of Greece 6.1 9.L 11.5 14.4 commercial banks 4.0 11.5 16.1 22.7 snecial credit institutions 4.0 6.8 9.L 13.0 central government 0.5 1.0 0.8 0.6 Source* Bank of rlr_nc 89. The continued normalization of the credit market is evidenced by-q the shft of'sucsi the p%rn-trci% nf' fivfl The s'hare of Bnkl of Greece funds (excluding public entity deposits) in total credits out- StanA4n had Anlimed from V9 4m 101 7 +n 904 at +h kn"A ^f 19A3 r41a the share of credits provided by the commercial banks went up from 35% in . V L d c .ve±~ £~U. J.f LlLL -Fa lo in,JUI WI.L L ou:1 Wlt, 11.JU .1 crease of private deposits with the banks. Until 191, the public was very re±.LUCtu-Unjt t -1atving,1 OcV11. ',L1 UIU.Ld LIUM LUIUU to hoard .old sovereigns or to lend privately at exhorbitant interest rates. However, witn relative price STEabilty, an increasing confidence in the national currency began to appear. In this improved climate the interest rate on savings and time deposits was raised from 7% co ! ut in Nay 1956, with substantial and immediate effects. By the end of 1956 savings deposits had more than doubled, reaching Dr L,:r million, and in 1957 another increase to Dr 4,100 million took place. The upward trend has been surprisingly well maintained since, de plte the succesaive re- ductions in the rate of interest to 4.5 percent in November 1960, the still prevailing level. -he rate of growth of deposits went gradually aown to 18% in 1961, but increased again to 28% in 1963. 91. Along with the returning confidence in the currency and the re- constitution of cash holdings by firms and I.naIV%uaOU R.!. Sed by the .increa-e in deposits, the velocity of monetary cicication clined sub- stantially, a fact which in turn was reflected in %'ne absence of serious inflationary pressures. Dishoarding of gold sovereig!is and the gradual progress in a modernized "monetization" of the economy is evid-riced by the fact that the number of savings accounts increased from 170,000 at the end of 1955 to 1.4 million at the end of 1965. To some extent, the long-term high rate of increase of deposits is a reflection of the gradual shift of a formerly unrecorded, but apparently quite important volume of transactions of money dealers to the normal channels of the banking system. This also means that banking statistics have probably overestimated the growth of the effective money supply. - 23 - 92. In line with the basic policy of the Currency Committee to create wider margins for long-term financing, interest rates on time deposits were held as high as 6.5% for deposits for two or more years. Time deposits started rising at a rapid pace in 1962, and now repre- sent about 15'% of total bank deposits, compared with an average of 8% up to 1961. 93. A 2reat deal of effort has been directed towards the pro- vision of long-term funds to the economy by creating and improving the channels and outlets. The Economic Development Financina Organization (EDFO), a government agency providing long-term funds to industry, had a rather slow arowth of their business in recent years. The Industrial Development Corporation (IDC), largely owned and controlled by the Glovernment.. was Pstahlished in 1960 to nrovide venture canital and con- sulting services, with the view that it would indirectly contribute to the develoPnment.no the apital marketby ultimately alleviating the lack of suitable securities. IDC and EDFO being complementary and facing with a capital of some Dr 4,500 million wholly owned. by the state, was formed through +he amalgamatn Of +hes...+.. i-nsittioS in the fal 1P 1964. In addition, two competing private investment banks have been es- +h1 4 cheA I1 OI. 1 +In fn +T. d " 4 mo^ n1 hn" I . -4+, +hl -nny+i e-1 - pation of a number of large foreign banks. The National Investment Bank Greece and the Investment Bank SA was launched by the Commercial Bank of 71,. U onsu erU I1 l 1% E U ± uu t'l CU.. L "I_VC,L.Lj1I11U VJ.L U,LI U±~1 ~.LI. U system, it is not surprising that the capital market is very narrow and h as yet to Advance beyond thP stage of. some inIa suces -e- - --suMes- of bonds and shares totalled just under Dr 7 billion in the period 1957-63, ofL Which aout Dr U bilinLU1 VV UhvUe H bee raised in th t fou1 yeo. 1uw- ever, apart from bonds floated by the central government and the Public rower Corporation, the amounts raised nave been negligible. Hany pre- conditions relating to Greek industry itself have to be fulfilled before an adequate quantity anu quality of becurities wi.l eUtablin a sounu basis. The volume of transactions in the Athens Stock Exchange has de- clined Irom aLmost 608,uuu 5nares in 1961 to 260,000 in 1962 and 2uuu in 1963, along with falling prices. BAlACE U PAYM NTS 95. During 1955-63, exports increased 3.5-% a year against a growth in imports, and covered only 40% of imports at the end of the period. invisible receipts and emigrantsfremittances (including wages and salaries) played an increasingly important role in covering the deficit and a substantial inflow of private capital, especially non-business capi- tal in recent years, further reduced the deficit before aid. External aid, especially U.S. aid, also helped to avoid balance of payments difficulties and foreign exchange reserves increased continuously from $161 million in 1958 until 1964, when they declined slightly to $266 million. - 24 - GREEK BALANCE OF PAYNENTS (million U.S.$) Averave of Averape of 19_5-6 19626-63 1. Goods and Services: Ernorts (f'aO.b.) 908.1 269th Imports (c.i.f.) 432.8 719.4 Trrl hnnnp 7 o-r Service receipts 124.2 259.7 Service matrmm 3 * Rh. 7 Balance on services 85.7 175.0 Total -139.0 -274.9 2. Emigrants' Remittances Reparations and indemnities 1.3 21.9 Lmport creui- net) 18.7 Other private capital (net) 23.1 72.7 Total 40.7 95.7 4. Balance Before Aid (1+2+3) -42.2 -28.0 5. Official Grants and loans (net) 71.7 52.6 U.S. Grants and Loans 71.7 48.0 Others - 4.7 6. Overall Ealance 29.5 24.6 7. Monetary Movement (increase - ) -2b.6 -20.9 8. Errors and Omissions - 0.9 - 3.7 9. Foreign Exchange Reserves (excluding IMF tranche) in 1955 and 1963 200.8 277.9 10. Suppliers' Credit Outstanding in 1955 and 1963 53.5 169.9 Source: I1T Balance of Payments Yearbook. - 25 - Exports: Growth, Structure and Distribution 96. Exports expanded at a higher rate than the GNP in the period economic expansion in Western Europe. In 1959 exports suffered a set- bail,i chLJA~U c icided ,VLL1 L U LAC V C.LLCZ.Wjf1 .L AJLIV JLULA-LO.LLI L.L.C-.. A.1 then, they have risen 7% a year, partly because of increasing bilateral L, U~ WJI± ~ ±L U n LU Luntris..L This a.L~) d~ L1U'JVt;: , 1-_C10t; Wl-,Y U0)U for much needed improvements in export methods. 97. Agricultural exports have been Greece's mainstay and their share of total exports has remained at around 60% over the last decade. Of these, the importance of cotton and fresh fruits has risen while that of tobacco and raisins has fallen; yet tobacco continues to be the lead- ing export. The share of minerals and metals has declined by two per- centage points. The most striking feature of the export structure is the increase in the share of consumer manufacturers, the most important of them being leather products. 98. Recently, some significant changes have taken place in the direction of exports. In the sixties, the eastern bloc countries have been taking more exports than they did in 1957--their share increased from 12% to 215 of the total--and the relative importance of Germany and France has declined, although Germany still continues to be the most important single customer, accounting for about 18/- of total exports. 99. An analysis of the regional pattern of Greek exports by coun- tries and commodities, for the years 1962-1963, indicates the relative importance of various markets for each of Greece's main exports. The Common Market provides the largest market for fresh fruits, currants and sultanas, tobacco and ores and metals which, together with other agri- cultural products, account for nearly two-thirds of Greek exports to Common Harket countries. The U.S.A. is the most important single customer for Greek tobacco, accounting for a third of tobacco exports. The eastern bloc is the principal buyer of citrus fruits, raw cotton, hides and skins, and olives and olive oil, and takes over one-third of bauxite and about one- fifth of tobacco exports. The Common Market countries, eastern bloc and U.S.A. together import about two-thirds of almost every important Greek ex- port product. with the exception of currants and industrial and handicraft products. The U.K. is the principal market for currants. Imports: Growth, Structure and Distribution 100. The growth of imports in the early postwar years has been re- strained by ouantitative restrictions but nevertheless has been ranid- Sib- stantial increase in imports during 1953-53 was followed by a levelling off in 9e-smn The ear geis ias continued since then, due maIet iate- scale investirent and changes in consumption patterns. Imports are estimated ..~~.-, m L.L.L.LJi Li .LJ 4 - 26 - 101. The structure of imports changed considerably during 1955-64,, The share of capital goods nearly doubled, while that of consumer manu- factures remained more or less the same, mainly because of increasing domestic production of textiles and light industrial manufactures. The declining share of chemicals and fuels may also be attributed to improved domestic supplies of these products. The share of agricultural. products declined as a whole, but its composition changed with the share of meat. coffee and sugar going un. 102. The Common Market countries' share increased. with the excen- tion of Germany, whose share in Greek import trade remained more or less the same. The shares of the ULK- and the U1S-A did not chance very much, those of the eastern bloc other than the U.S.S.R. increased and the nthpr.-, ipr 103.~ ~~~~~~~ The Coo Make supled ona aeag,oer half of --ek import requirements of raw materials in 1962-63 (the most important of them beinig fertilizers, hmcl and irn" stel) n +n r, l n consumer manufactures which together constituted more than 90% of Greek half of fuel products, one-eighth of capital goods, and one-tenth of con- Agricultural products (chiefly meat), fuels and consumer manufactures ac- counted for oJvers even- t*enths of total uidted States exports to Greece. The eastern bloc supplies the largest quantity of timber and also provides a considerable quantity of meat, sugar and luel prouucts. leir traue with Greece is more evenly distributed. Terms of Trade 104. Greece has enjoyed an improvement of its terms of trade in the sixties with all of its major Western trading partners but the United King- dom, the overall index showing a rise from 97.7 in 1960 to 118.1 in 1963,. Fragmentary evidence seems to indicate that Greece had more favorable terms of trade with the eastern bloc also. Services and Private Transfers 105. The most striking feature of the Greek balance of payments is the importance of service income and emigrants' remittances which have grown substantially. Since 1956, gross receipts exceeded exports and net receipts surpassed exports in 1961. In 1963, nearly 50$ of imports was financed by net services and private transfers. 106. The most dynamic of the services is tourism. Between 1955 and 1963, tourist receipts more than tripled, spectacular growth occurring in the 1960's. Due to the Cyprus crisis income from this source in 1964 is not likely to be much higher than in 1963 when gross income amounted to $95 million. - 27 - 107. Transportation receipts also more than tripled, expanding at a higher rate since 1957. Of its components, shipowners' remittances have more than quadrupled between 1959 and 1964, largely attributable to changes in tax laws which favored the transfer of Greek owned ships from other flags to Greek registry. Seamen's remittances changed very little. Other service income contributed a smaller proportion of the total in 1963 than a decade ago. 108. Emigrants' remittances (including wages and salaries) slackened somewhat during 1957-60; since then they have increased at about 20% a year. Provisional estimates for January-October 1964 show that private transfers have declined over the nast two corresnonding neriods. i09- Met privatpe capitanl flowT. hq. ,r.q- ib t.;;tn tAial1v f rnm ' P2 million in 1955 to $83 million in 1963 (for January-October 1966 it is es+ima+ed n+ *7A millinn) thz grPnfnr np-rt nf t.h qrnuit.h bming .-rjiut to the transfer of capital by repatriated Greeks mostly for investment in housqing andl cohecalbild1ings. The lai ofr 1903 to promotep privatrinest ment did not, initially, have much effect on transfers. Since 1957, there have been some i.-provements and they acutdfo%r inal (o-r i6l if, pvniriin deposits) of the total capital inflow during 1959-63. Besides, there has credits, in 1956-59, 1962 and 1963. 110. Apart from short-term movements in commercial bank assets and '.LJL.L.U.t0j a~ 0UU0UCU4VLaJ. %UecL.L1iC Uk;L;U.L .LVU LLU .7v_) in it; L1LLLUw V.L %,.C1jj1L_L on behalf of the Government and the public corporations. However, this has been reversed in .196 an the inlo of caia une-hi aegr0xcee $20 million in the first ten months of 1964. 111. U.S. aid has been the main source of public assistance. Up to n ^rl- - - -' A- .'I s c>3, it was of the order of $1o0 million per annum and since then it has amounted to about $45-50 million a year accounting, on an average, for about pu/ o. Ute current account deficit. Recently, offical cappital nas veen provided by European Common Market countries and the European Investment Bank. Foreign Exchange Reserves and Liabilities 112. Official foreign exchange reserves stood at $266 million in October 1964, about $16 million less than the peak reached in May 1964,and were equivalent to four months' payments for imports in 1964. In addition, commercial banks' foreign exchange holdings totalled $36 million. 113. Total foreign exchange liabilities at the end of 1963 amounted to $552 million, of which $101 million are repayable in drachma. Estimates for 1964 suggest that the effective foreign exchange liabilities will have gone up by about $110 million over the 1963 level. Since commercial banks' lia- bilities exceeded their foreign exchange holdings by less than a million dollars in October 1964, foreign exchange liabilities as of 1964 may be esti- mated around $660 million, of which $445 million are repayable in foreign currency. There were also $190 million of suppliers' credits outstanding. - 28 - Il Tn 10 ACs oarriine of ?%nt +J v-M+. A-h+ mnnir he in +)In -on of $30 million, two-thirds of which may be in foreign exchange. If the liklyT ^oSt Of prwrdebt settl1ement s i n 1565 i s ,Aded, forei gn exchage needed to service the external debt obligations will be approximately $27 amount of suppliers' credits outstanding for which importers have obtained an exchang guarate rose dur±ing 1764 fromI &P.Lfkd Lilon±U Io 4)4V4: 1[1.1-±LIU Trade Rel ati ons 11). In Novemoer 1962, Greece became the first associate meMber of the European Economic Community. The agreement provides for the gradual estab- lishment of a customs union between the EEC and Greece and for special measures --such as protocols concerning assistance from the European Invest- ment Bank to the extent of $125 million over 1963-68 and the common agricul- tural policy on tobacco and the external tariff on tobacco and raisins-- to protect and help develop the Greek economy. It also provides for the harmo- nization of economic policies between the EEC and Greece and agricultural policy in particular, within 22 years. Further, Greece will enjoy the full tariff reductions as applicable to other members of the Community while it is allowed to abolish tariffs on imports from the EEC within 12-22 years, depending upon the nature of the product. 116. The first effect of the treaty hoped for in Greece was an expan- sion of expo.-ts to the EEC. In the first year of its association, Greek ex- ports to the EEC increased by about 5%, but its share in Greek exports trade fell, largely due to substantial intake of Greek tobacco by the U.S.A. which raised the total value. In the first nine months of 1964, total exports to the EEC increased both proportionately and absolutely over the corresponding period in 1963. However, it is too early to assess the impact of Greece's association with the EEC on Greek economic growth and exports in particular. 117. Greece has entered into bilateral trade agreements with the eastern bloc countries. Yueoslavia. Finland. U.A.R.. Brazil and Israel. Ex- ports to these countries consistently rose and averaged about $80 million in 1961-63 as against $96 million worth of imports. Their share in Greek export trade dropped from 33% in 1962 to 28% in 1963 due mainly to a decline in exoorts to Yugoslavia. The eastern bloc alone accounted for 239 of Greek export trade in January-September 1964. The authorities realize the dis- Ar4VAnopqe Asqqnnit"-ri wit.h a large7Pr vn1imp. nf~ Grk trnei wi+.) 'hiIn.PA1 especially eastern bloc countries. Since the prices offered for Greek ex- nr.q hv t.hpm -o ntries have been attractive for the anlity of the Greek product, it is difficult to divert this trade. Prospects for Balance of Payments 118. With greater emphasis on industrialization and the likely increase will probably increase faster than in the period 1955-63. An analysis of the UO LL _L1111JUJL U* L c-1 vicyvl ,L UUI U! .JLTUU.LUies anAU L ,I U 'JIJu UU11o' LL pro- duction and the consumption patterns in the sixties suggests that imports in .L7tU Iay UbU 00 Wit UU-L U1 PL,)4V 1LLL)11U k.L.. U1-y 111cY 11k16 UU dLUUU 8% per annum). This could be reduced if import substitution were to proceed - 29 - at a progressive rate. Since traditional exports are not likely to expand rapidly, any substantial increase in export earnings would have to come mainly from new products, such as aluminum and nickel. Considerable im- provement in the exports of cotton, citrus and industrial and handicraft products could take place if Greece continues to increase its share of cotton imports into the Common Market countries, if eastern bloc countries continue to increase their intake of citrus, and if Greece is able to market industrial goods and semimanufacturers on a larger scale than hither- to. Under favorable market conditions, exports may increase at about 5$ per annum, and in 1970 total export earnings would be $430 million. Thus, provided external finance can be obtained, the size of the adverse balance of trade is likely to expand further during the remainder of the present decade. 119. The gap should to some extent be covered by the increase in net service receipts and private transfers. While the share of tourism should be much hiLher in 1970. shinowners' remittances and orivate transfers may increase more slowly than in the early sixties. Net receipts from services and the nrivate tranqft-r. mqv h nearly doubled by 1970. amountina to Vlq0 million. This could substantially reduce the deficit on current account nnH prhapsq to t.hp nrHopr of' .20-2fn millinn in 1970 Apln-t aqn P.t.inqtpH $160 million in 1964. 120. Inflow of private capital in the future will largely be dependent on the maintenance Of fi nancial equ Ij-jiiriu and t-he forign insors', as-_ sessment of investment climate in Greece as a manufacturing base for ex- ^ rjn +j'- +)sa Vln.r,. n M 1rd + +4 -,,a+ 1 ,ol An n 'r 4x+ta -Arn+ a, cheaper labor. Apart from the inflow of private capital, assistance can EVALUATION OF ECONOMIC GROWTH PROSPECTS Basic Policies of the Government 121. The declared fundamental principles to be followed by the new government consist of preserving econoicu l-beralimn and, at the same t-11m1e, arriving at a more equitable distribution of incomes and an accelerated de- velopment with the ultimate goal of leading Greece into the community of the industrialized nations of Western Europe. Within this framework, many diffi- cult problems are faced and a number of important changes in economic policy affecting credit, social policy, and structural reforms have been initiated. 122. It is noteworthy that the rapid rise in the money supply had little adverse effect on prices and the balance of payments for a long time. However, in the most recent past, the money supply exceeded substantially the increase achieved in production and capacity. This process evidently cannot go on indefinitely. Judging from developments in the price level and the balance of payments in the past, the monetary authorities appear to have - 30 - evaluated the movement of real magnitudes realistically and to have allowed monetary expansion to proceed within reasonably safe limits. The authori- ties are aware of the difficulties lying ahead. Emphasis is likely to con- tinue on maintaining a stable currency--the achievement of the last ten years, and gradually liberalizing the banking system. The responsibility of the commercial banks may therefore be further increased, and the role of the central bank and the Currency Committee more confined to the basic issues. 123. Expandina emoloyment is perhaps the most urgent task with which the Government is confronted and therefore high priority is given to achievement of a high over-all growth rate. with the hone of gradually ab- sorbing unemployment and underemployment along with a rise in incomes. How- ever. nrvious exnAntations have not been fulfilled. The tarqet of creat- ing 330,COO new jobs in 1960-64 was far from being reached. Large-scale .mioration has been alleviating the nroblem hut ha! nreated new ones hV the loss of skilled labor. The negative aspects of emigration have perhaps beeln overeu mhnati in thec -rie-ce+nt past, snce= itinosuehate longer run drawbacks will counterbalance the very real advantages of absorb- an uemlometand -reatin foeIn xcagereitan. I,- "ocia me 1,e have b e " ircte towvrd -Yi n,woqQnr1ncrasn ino of the lower income groups, aiming at a more equitable income distribution and the farmers has been eased by reducing the burden of their indebtedness to Similarly, tax rates have been reduced with effect from January 1, 1961, Compulsory education has been extended on a large scale, and salaries and P ,jJ.LU11. U. L;LV-L 5t;.LVZ;U1U liavu Ut eii l IL l2>. These measures an nthe aim of providing for a large increase in investment by the budget and the public enterprises raise difficult problems o1 financing as well as implementation. Although public invest- ment failed. to expand in 1963 and 1964, government savings declined in this period, whereas current budgetary surpluses tended to increase in the years before. In the light of the foreseeable public investment needs and the various social measures of the Government, a substantial increase in reve- nue is clearly needed. However, revenue from taxation has been growing at about the same rate as GNP since 1958, suggesting a lack of progression, mainly due to the low share of direct taxes. This is not only disappoint- ing in view of the business boom in the Greek economy, but also in con- trast to the fundamental principle of increasing government savings in Greece's stage of development. The widespread acceptance in Greece of the traditional objectives of progression and equity point strongly to a more aggressive use of net income and wealth as a basis of taxation. To remedy the various shortcomings, the Government is contemplating a tax reform. 126. In the field of public investment, many decisions are taken on an ad hoc basis and, apart from restricting the number of new projects to avoid the waste of funds connected with many projects started and not finished in time, there is no conscious setting of priorities. Ninisters, as well as high level officials, have no clear-cut policy lines to follow, - 31 - since policies of the former government have fallen into distrust, with- out being replaced by ideas specific enough to be relevant. Furthermore, elimination of organizational shortcomings, as well as improved efficiency in the public administration, could reduce bureaucratic impediments to the expansion of investment. 127. A comprehensive effort to coordinate all aspects of the Govern- ment's development policy is to be attempted by the five-year plan of 1966-70. Preparation of the plan is still at a very early stage and not much more than the Government's broad policy objectives and measures through which they were to be attained are known. The Center of Planning and Economic Research, under the supervision of the Minister of Coordi- nation, is in charge of preparing the plan, as well as long-term and annual programs for the public sector. At the end of 1964, the Center was in process of setting up teams to investigate the various sectors of the economy in order to have a first draft of the plan ready in the fall of 1965. 128. The Greek authorities believe that an annual growth rate of at lns+. 7 should be tainp- Thi rnt nf arowth is not. only an end in it- self if the policy objective of a more rapid pace of economic development hns ton becno reality bunlso rearded As rncessrv in view of rrp: I R association with the Common Market. 129. Government policy measures such as tax incentives, development of infrast:ruct,_-e, cotnigtaifpoecino he Hrmc-q+A manrketm nd,i at the same time, a favorable access to the Common Market should stimulate towards a more efficient production structure and the comparatively still tage of rising incomes in the domestic market, as well as to bolster th-eir production has yet to have its effect on output, and present investigations _LIL 1LI1 r,LI may( QPUJJi± Up LIt:W .IV LIei. UJJ -uI-LLt;0.~ LIUIC; f cL_L.L%L.0 12-C; needed to enable tourism to benefit from the opportunities open in this ±J__ iLU iJ4V U6LI J1I V UC 1= t - L 1-uaLIVI I uo 1 I CI L L ULL" &L tz W LL11LL UI'.;U for all practical purposes, its growth is not likely to be as fast as in industry and tourism. nowever, heavy investments are urgent in strUctural reforms, marketing arrangements, livestock improvement and research, in ad- dition to land reclamation. So far, the last has absorbed the major part of agricultural investment, but has been dispersed over numerous projects. A concentration on fewer undertakings, while overhauling major policies, should yield quicker benefits. The Agricultural Bank could be a powerful instrument in the re-establishment of an efficient agriculture, instead of being politically dominated for social purposes. Furthermore, increasing government investments in infrastructure may be required in order to sup- port the expansion of production, but here again the first need is for a more selective investment policy, especially in transport. - 32 - 131. Apart from the need of systematically setting priorities, a more vigorous effort to increase over-all savings is clearly indicated. The gross savings ratio to GDP was about 20 in 1961-63, but has been declining steadily from more than 22% in 1960. Although the growth of private savings deposits with the banks has been encouraging, it would be unrealistic to expect such a spectacular rise to be consistent with the prospective increase in investment, and the capital market is not sufficiently developed to make a sienificant contribution. Some in- crease in self-financing should also be expected but is likely to fill only a small part of the gap. In public investment, moderately increased government savings from higher taxes are likely to fall short of the required amounts. and foreign resources are unlikely to be sufficient to fulfill the balance of investment needs commensurate TTith flh qimr nf fhp GvrnrnmPnt,. 1o1m9n hivp hp mnp fnr thp Attlpmpnt nf mninr narts.C of the prewar debts presently estimated to total about $216 million, and negotiations have hn entir-e-nA e nnorinn +.ho nmniin q il in cPfii1t. Greece has also consistently serviced its postwar debt. Progress in eco- nomic deelpm n a enipe ieoe h atdcd,det large extent to sound monetary and balance of payments policies. Greece's -1--tv, vn n --n,; -- -nvtr 4-- - 4 4-c nra - -+ --n . A-k+ , -^1 - -VA'A6 'mJ6, AAJu~ * UW. .J U V A A. U'- ''U UF U 4 4 L. A & l - U, .±~I ing the estimated impact of the settlement of its prewar debts, amounts Lge Uow a/r .L setlement of " th oUaLd Let, Greece is regarded as gress towards settlement of the outstanding debt, Greece is regarded as credtworthUJULy Uor aU) substtia aMuIUntIL oatU.L "V1cLLd.L 1U U.Lg11 ULuL. STATISTICAL APPENDIX 'M -'L 4.L D 1:,&:;.-jc- UVtLJU, 1 Population rniates, Virth aU Deatn rates and populatiUon distribution. 2 Estimates of Percentage Composition of Population (by Liveli- hood). 3 Economically Active, By Divisions of Economic Activity and Level of General Education: 1961. 4 Eaigration and its Effect on the Labor Supply Position Gross Domestic Product and National Income. 6 Analysis of the Gross Expenditure of the Economy. 7 Industrial Origin of Gross Domestic Product of Greece. 8 Savings and Savings Rate. 9 Percentage Structure of Gross Fixed Capital Formation. 10 Consumer and wholesale price indices. 11 Area of Farms, average size of farms and density of ponulation and Labor Force in Agriculture. 12 Increase in Production, 195o-1963. 13 Livestock Population and Production, 1950-1961. 14 Exports of Main Agricultural Products 1938, 1958-1963. 15 Credit to Agriculture and Fishing. 16 Structure of Manufacturing Industry, Values and Percentage rromnn-,if.ion )f Ontniit (nDP)- 17 Tranprst97-93 21 Pu l c Finance: CentralGovrlw ?nment Bu g tOnrr1~1 Years 1957-1963. 21 Table Public Finance: Central Government Current Revenue. 22 Composition of Tax Revenue and Tax-National Income Ratio. 23 Central Government Investment Expenditures by Branches of Economic Activity. 24 Public Finance: Financing of Central Government investments. 25 Payments and Receipts of the Consumer Goods Account. 26 Consolidated Balance Sheet of the Monetary System. 27 Factors Affecting Money Supply. 28 Deposits with the Bank of Greece. 29 Deposits with Commercial Banks and Special Credit Institutions. 30 Total Credit by Source. 31 Total Credit by Sectors and Branches. 32 Interest Rates on Bank Deposits. 33 Interest Rates on Bank Credits. 34 New Issues of Securities 35 Greek Balance of Payments, 1955-1963.3 Exports by Main Categories and by Geographical Areas. 37 Imports by Groups of Products and by Geographical Areas. 38 Regional Distribution of Exports by Countries and Commodity and Commodity Groups, 1962-1963. 40 Table !a: GREECE - EXTE UAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBU-CED AS OF DECEMBER 31, 1964 Debt Repayable in Foreign Currency REVISED (In thousands of U.S. dollar equivalents) Debt outstanding December 31, 1964 Net of Including undisbursed undisbursed TOTAL EXTERINAL PUBLIC DEBT /1 365,909 /2 414,005 /2 Pre-14orld IdAT-- TT nak+ 9 14 ?1K 91Q 014 Publicly-issued bonds /3 191,327 191,327 Dollar bonds 3b,43b 3d,43b Sterling bonds 152,891 /A 152,891 /4 4% Refugee Loan of 1929 (Tranche of U.S.A.) 13,156 13,156 Debt not yet settled 11,1452 11,452 Dollar bonds 7,132 7,132 French franc bonds 277 277 Gold franc bonds / /5 Sterling bonds 4,143 4,043 Post-World War II Debt 149,974 198,070 Privately-placed debt 50,665 50,665 Sunnlierst credits ik01 TE T Other 36,064 36 064 Tnan frnm Cnnnnl 1l Enrnnp h4 L 4C Loans from European Investment Bank 1,600 b,000 Loans from U.S. Government 33,879 AID 10,263 44,300 .qnrn1i n PrnPrt.v Th Ann i no Maritime Commission 88 88 L-oans from other Western Gover-Ment [ R Ang' Az 1.61l France 3 3 3 Yugoslavia 322 322 71 Does not include Greece's share in the Ottoman debt. 72 Does not include outstanding Pre-World War II Gold Franc bonds. See footnote 5. 7 The dollar and sterling Offers of Settlement provide for payments to be made only during the years 1963-1967 but can be made Dermanent at the oition of the Greek Government. / Does not include "funding bonds" to be issued in lieu of arrears of interest in the amount of approximately ' 5,645,000. /5 The following gold franc amounts were outstanding December 31. 1964: GF 60,000,000 Salonika-M1onastir Railway 3%, due 1983 GF 11,922,000 GF 170.000.000 guaranteed Gold Loan of 1898. 2-'. due 1963 GFAn-ogn nnn GF 60,000,000 Greek Loan of the Three Protector Powers, 51% due 1871 GF 35,67W mi /6 Societe Europeenne pour le Financement de Material Ferroviaire. Statistics Division IBRD-Economics Department April 13, 1965 REVISED Table Ib: GREECE - ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 1964 /1 Debt Repayable in Foreign Currency (In thousands of U.S. dollar equivalents) DEBT CUTST VTAT fWETM OF DXERDN1 PAVMENTS DTTRTNG PERD INCLUDING AMORTI- INTEREST TOTAL TTTTTDQU 7APTAO 1965 388,367 16,763 17,982 34,745 1966 381,208 14,605 11,348 25,953 1967 364,317 14,952 11,330 26,282 1968 347,188 13,749 10,878 24,627 1969 331,217 13,913 10,81 24,393 1970 315,055 14,585 10,090 24,675 1971 298,092 14,931 9,422 24,353 1972 280,744 15,051 8,731 23,782 1973 263,271 15,298 8,032 23,332 1974 245,485 14,876 7,325 22,202 1975 228,061 11,068 6,699 17,767 1976 214,379 10,774 6,240 17,0114 1977 200,933 9,283 5,814 15,098 1978 188,929 9,343 5,109 14,752 1979 176,816 9,349 5,008 14,357 TOTAL PRE-WORLD WAR II SETTLED DEBT (PUBLICLY- ISSUED BONDS) /2 YEAR DEBT OUTST (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMORTI- UNDSRUSED 7.ATON INTEREST TOTAL UNDTSBURSED ZATTON 1965 191,327 2,472 11,070 13,542 1966 198,459 943 4,864 5,807 1967 195,230 943 5,121 6,064 1968 192,110 1,007 5,03 6,050 1969 188,881 1,076 4,959 6,035 1970 185,556 1,164 5,068 6,232 1971 182,014 1,254 4,974 6,228 1972 178,342 1,302 6,878 6,180 1973 174,618 1,398 4,784 6,183 1974 170,733 1,498 4,682 6,180 1975 166,687 1,605 4,578 6,183 1976 162,468 1,712 4,467 6,179 1977 158,084 1,825 4,356 6,182 1978 153,538 1,943 4,236 6,179 1979 148,826 2,068 4114 6,182 See footnotes at end of table REVISED Table ib: GREECE - ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON EXTERNAL PUBLIC ÏEBTO~UTSTAIDING INCLUDING UNDISBURSED AS OF DECEMER 31, 1964 /1 (CONT.) Debt Repayable in Foreign Currency (In thousands of U.S. dollar equivalents) DOLLAR BONDS DEBT OUTST YEAR (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AHORTI- INTEREST TOTAL UNDISBURSED ZATION 1965 38,1436 179 931 1,110 1966 37,7145 179 986 1,16$ 1967 37,083 179 1,027 1,206 196 0436,Lj.7 i12 i,011 i1,203 1969 35,785 205 994 1,199 197n 3 , 2 223 1 ,) 1 ,2 1 1971 314,378 243 1,009 1,252 l1723 3.3 ,16 2 989nno 1,230 1973 32,851 270 968 1,238 17(4 32,U49 29 9-47 1,23 1975 31,209 314 924 1,238 1976 3 u33 3 900 r-,23 1977 29,413 361 876 1,237 178( 28,0ó2 386 05 i237 1979 27,474 413 824 1,237 STERLING BONDSG /3 DEBT OUTST YEAR (BEGIN OF PERIOD) PA¯MENTS DURING PERIOD INCLUDING AMORTI- INTEREST TOTAL UNDISBURSED ZATION 1966 160,714 764 3,878 4,642 1967 158,1147 764 K4,09 4,858 1968 155,663 815 4,032 4,847 !1969e n306 871 3,965f1. 4,3 1970 150,1430 941 4,040 4,981 1971 1 47, 3 1 ,01 -3 n,6 1. n,76 1972 14,726 1,053 3,889 4,942 1931).1,767 i118 3,6 al,91.ni5 1974 138,684 1,207 3,735 4,942 i1975 13, .7 -, 2 3 6 . 9 c5 -L7 f o L),4 1LCJ u2O~4 4 742 1976 132,138 1,375 3,567 4,942 11 1 ,Y n 3r ,180 n r,9 5 .171 f .L~UOJ -L.74cL J>4UU4p79 1978 125,076 1,557 3,385 4,942 1979 121,352 1,655 3,290 ,945 See footnotes at end of table REVISED Table lb: GREECE - ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON EXTERiNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 1964 /1 (CONT.) Debt Repayable in Foreign Currency (In thousands of U.S. dollar equivalents) TOTAL POST-WORLD WAR II DEBT n m Crtmom ujDDI UUI.L YEAR (BEGIN OF PERIOD) PAYMENTS DURING PERIOD TlT^TfATTT T A Khm- r i1'jUiJ11 U ArliI - INTEREST TOTAL UNDISBURSED ZATION 1965 197,040 14,291 6,912 21,203 1966 182,749 13,662 6,84 20,146 1967 169,087 14,009 6,209 20,218 1968 155.078 12,742 5,835 18,577 1969 142,336 12,837 5,522 18,358 1970 129.L99 13.421 5.022 18.h3 1971 116,078 13,677 4,148 18,125 1972 102.h02 13.7L9 3,853 17,602 1973 88,653 13,900 3,248 17,149 197L 7h.7q2 13.378 2.6h3 16.022 1975 61,37k 9,k63 2,121 11,58k 197A 51,911 9, A? 1-773 10.834 1977 42,849 7,458 1,458 8,916 1978 3C 391 7 ,On 1171 F -7A 1979 27,991 7,281 894 8,175 DDTTArTWTVDTA0n nDMT TPAT DEBT OUTST VrAD DVrTT ATT D DTn1 D AVLMT-1rr1Q n)TTUTTTO DTIDTATn INCLUDING AMORTI- TmT'%TnTCT)rQn 17 A rrrn1%7 INTEREST TOTAL 1965 50,017 9,09k 2,66k 11,759 1966 40,922 6,719 2,226 8,946 1967 34,203 6,742 1,893 8,635 1968 27,461 5,066 1,520 6,586 1969 22,396 3,453 1,275 4,729 1970 18,942 3,536 1,070 4,606 1971 15,406 3,624 859 4,483 1972 11,782 3,717 643 4,36o 1973 8,065 3,816 k21 k,237 1974 4,248 3,921 193 4,114 1975 327 218 15 233 1976 109 109 3 112 See footnotes at end of table REVISED Table lb: GREECE - ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON EXTEREAL PUBLIC DEBT OUTSTANDING IMCLUDING UNDISBURSED AS OF DECEMBER 31, 196h /1 (CONTA) Debt Repayable in Foreign Currency (In thousands of U,s. dollar equivalents) PRIVATELY-PLACED DEBT - SUPPLIERS' CREDITS DEBT OUTST YEAR (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMORTI- UNDISBURSED ZATION INTEREST TOTAL 1965 13,953 7,081 743 7,825 Io~ n £ 07-1 1. tnI7 .3e . n) I -L7UJ Uyu I _ 4J271 -IC2 ,7r--L 1967 2,274 1,536 125 1,661 PR'VATEL-PiELD DEBT - UThiE DEBT OUTST YEAR kBEG±IN OF PER±iIOD) PAYMENTS'i URItNG PERIOD INCLUDING AMORTI- UNuIuffD ZTIO TNTER~EST TOTAL UNZIBbURSED LITION 1965 36,064 2,013 1,921 3,934 1966 34,01 2,122 1,902 4,024 1967 31,929 5,206 1,768 6,974 1968 26,723 4,327 1,1495 5,823 1969 22,396 3,453 1,275 4,729 1970 18,942 3,536 1,070 4,606 1971 15,1406 3,624 859 4,483 1972 11,782 3,717 643 1,360 1973 8,065 3.816 421 4,237 1974 4,248 3,921 193 4,114 1975 327 218 15 233 1976 109 109 3 112 See footnotes at end of table REVISED Table ib: GREECE - ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMER 31, 1964 /1 (CONT.) Debt Repayable in Foreign Currency (In thousands of U.S. dollar equivalents) COUNCIL OF EUROPE LOANS DEBT OUTST YEAR (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMCRTI- INTEREST TOTAL UNDISBURSED ZATION 1965 4,425 711 599 1,310 1966 3,71h 14L6 223 369 1967 3,568 205 213 419 1 3,6 217 2M1 .-i8 1969 3,1h6 267 188 455 17ic 2,8f79 3 172 c 1971 2,559 339 152 491 i -1 n n ^ fO 1 «31 1 n 172 2,220 3 3 U9- 1973 1,862 379 110 489 I ~0 0", 10" 19 74 1,40 399 87 486 1975 1,085 307 63 370 1977 494 224 28 252 1978 270 206 14 220 1979 6h 64 4 68 EUROPEAN iNVESTIIMIT BANK LOAN DEBT OUTST YEAR (BEGIN OF PERIOD) PAYMNTS DURING PERIOD INCLUDING AMORTI- TTNTERMT TmTAT. UNDISBURSED ZATION 1965 6,000 - 62 62 1966 6,000 - 125 125 1967 6,000 203 171 37h 1968 5,797 216 165 381 1969 5,581 229 159 388 1970 5,352 242 152 394 1971 9,110 257 19 h02 1972 h,853 272 138 410 1973 L,981 288 130 hiR 1974 h,293 306 121 427 1975 3.987 324 112 136 1976 3,663 343 103 446 1977 3,320 364 93b7 1978 2,956 386 82 468 1979 2,570 [L08 71 1t79 See fo-otnotes at end of table REVISED Table lb: GREECE - ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 1964 /1 (CONT.) Debt Repayable in Foreign Currency (In thousands of U.S. dollar equivalents) EUROFIMA LOAN nLDnM rTTMC!M YEAR (BEGIN OF PERIOD) PAYMENTS DURING PERIOD T'T/ T TMTTnr A BfK mr n1usLa1 AiIi.L- INTEREST TOTAL UNDISBURSED ZATION 1965 603 34 32 66 1966 569 36 31 66 1967 533 37 29 66 1968 L96 39 27 66 1969 457 41 25 66 1970 hl 13 23 66 1971 372 46 21 66 1972 32A h8 18 AA 1973 278 50 16 66 197) 228 53 13 66 1975 175 56 11 66 1974 190 CA 8 66 1977 61 61 5 66 TT , 0MIPATOMNT TAAMR _ P-TAT DEBT OUTST V AD (tV-TM nV DVDTAn DAVMMMThQ TTDTT%7 DIDTAn INCLUDING AMORTI- T1TT%TC:TMC~ Vn r7 A Mrf\1' INTEREST TOTAL 1965 72,857 2,005 1,169 3,17k 1966 70,852 2,338 1,467 3,805 1967 68,515 2,398 1,673 4,071 1968 66,117 2,780 1,875 4,656 1969 63,337 4,422 2,011 6,433 1970 58,915 4,855 1,924 6,779 1971 54,060 4,987 1,771 6,759 1972 49,072 4,929 1,605 6,534 1973 44,143 4,943 1,437 6,380 1974 39,200 4,812 1,268 6,081 1975 34,387 4,671 1,112 5,783 1976 29,716 4,380 960 5,340 1977 25,336 2,922 830 3,752 1978 22,414 2,922 727 3,648 1979 19,492 2,922 622 3,544 See footnotes at end of table REVISED Table lb: GREECE - ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON ETERNAL PUBLIC DET¯OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 196h /1 (CONT.) Debt Repayable in Foreign Currency (In thousands of U.S. dollar equivalents) U,S, GOVEINMENT LOANS - EXPORT-IMPORT BANK DEBT UTST YEAR (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDIING AMORI - UNDISBURSED ZATION INTEREST TOTAL 1965 14,528 809 552 1,361 1966 13,719 1,171 589 1,760 1967 12,548 1,231 542 1,773 1968 11,317 1,291 91 1,782 1969 10,026 1,303 438 1,7h1 1970 8,723 1,316 384 1,700 1971 7,h07 1,256 328 ,584 1972 6,151 1,198 27h 1,h72 1973 4,953 1,212 218 1,430 1974 3,741 1,081 162 1,2h3 1975 2,660 940 118 1,058 1976 1,720 649 78.- 727 1977 1,071 357 54 411 1978 714 357 35 392 1979 357 357 15 372 U.S, GOVERNIMIENT LOANS - AID DEBT OUTST YEAR (BEGIN OF PERIOD) PAYIENTS DURING YEAR INCLUDING AMORTI- ITR7,2r TA'T, UNDISBURSED ZATION 1965 L),300 - 291 291 1966 3,300 - 580 580 1967 IL,30o - 861 861 1968 4,300 323 1,1h2 1,h64 1969 l3,977 1,952 1,358 3,310 1970 h2,025 2,372 1,353 3,725 1971 39,653 2,565 1,28 3,89 1972 37,088 2,565 1,199 3,764 1973 3h,523 2,565 1,11 3,680 197h 31,959 2,565 1,030 3,595 1Q79 9, 3o 9 6 31.10 1976 26,829 2,565 861 3,h26 197724,2 5 2 565 7 63,326 1077 91, -DAC ??Y,~ 1978 21,700 2,565 692 3,256 1070 19 ,13 2,6 6047 3,172 See footnoteus at end of 'U uuLft REVISED Table Ib: GREECE - ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 1964 /1 (CONT.) Debt Repayable in Foreign Currency (In thousands of U,S. dollar equivalents) U,S. GOVERNMENT LOANS - OTHER DThf OUTISTc~ YEAR (BEGIN OF PERIOD) PAYMENTS DURING PERIOD TH~TTTTCET AB1jRAhmr A LJUI1n AMnnI- INTEREST TOTAL UNDISBURSED ZATION 1965 14,029 1,196 326 1,522 1966 12,833 1,167 298 1,465 1967 11,667 1,167 270 1,437 1968 10,500 1,167 242 1,409 1969 9,333 1,167 215 1,381 1970 8,167 1,167 187 1,354 1971 7,000 1,167 159 1,326 1972 5.833 1,167 132 1,298 1973 4,667 1,167 104 1,271 1974 3.500 1,167 76 1.243 1975 2,333 1,167 48 1,215 1976 1.167 1.167 21 1,187 LOANS FROM OTHER WESTERN GOVERNMENTS DEBT nUTST YEAR (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMORTI- INTERES TOTAL UNDISBURSED ZATION 1965 63,139 2,1447 2,386 4,833 1966 60,692 4,424 2,411 6,835 1967 56,268 4,424 2,229 6,653 1968 51,844 4,424 2,047 6,471 1969 47,420 4,424 1,86 6,288 1970 42,996 4,424 1,682 6,106 1971 38,571 4,424 1,500 5,924 1972 3A,147 6,424 1,318 5,742 1973 29,723 4,424 1,135 5,559 1974 25,299 3,887 960 4,847 1975 21,412 3,887 808 4,695 1976 17,525 3,887 655 4,542 1977 13,638 3,887 502 4,389 1978 9,751 3,887 350 4,237 1979 5,864 3,887 197 4,084 See footnotes at end of table IUW.jV .±L Table Jb: GREECE - ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON EXTERNAL PUBLIC DE.BT OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 1964 /1 (CONT,) /1 Includes service on all debt listed on Table la prepared April 13, 1965 with the exception of the following: Total $2,3,0 Pre-World War II Debt not yet settled 11,452,000 Debts for which terms are not available 14,186,000 )4% Refugee Loan of 1929 (Tranche of U.S.Ao) 13,156,000 Privately-placed debt 649.000 Maritime Commission loans 59,000 Loans from Yuzoslavia 322.000 /2 The nrolected service navments for the dollar and sterling bonds were made on the assumption that the offer will be made ormanent. /1 The amount nitst-qndlinc for 19c)(4 riot r- in-lurlp "finciing bonds" to be issued in lieu of arrears of interest; however, nNnp nqvmpn+..q nnrl nmmn. mit-q.nnrlina frnm 1AA nn hivI been calculated on a schedule including these bonds. Statistics Division T ADpDT ri 13- 19 .JJI~UJ AL 'J 11"ALL J.;i U I Vj April 13, 1965 Table 2 MID-YEAR ESTIMATES OF POPULATIONBIRTH AND DEATH RATES, 1951-1963. LIFE EXPECTATION IN 1961 Mlid-Year Population Population Increase Natural Births per Deaths pc (in thousands) Increase 1000 1000 Absolute (in thousands) figure 1/ % (in thnousnd7i:) 1951 7,66 60 1n6 97 20.31 7.51 1952 7,733 87 1.14 96 19.33 6.90 1953 7,817 8 1.08 67 1R37 7.2 1954 7,893 76 0.98 96 19.23 7.04 9 7,966 72 0.91 99 19.35 6.67 1956 8,031 65 0.82 99 19.70 7.40 1957 R n,0 0.1 9) 19. 26 7.6 1958 8,173 77 0.95 97 19.01 7.12 195 8,258 ). 993 19o.n0 7.327 1960 3,327 69 o.8h 97 18.88 7.27 91 8.,32 75 r On n7 17. 9 -7. 1 1962 8,451 h8 0.58 86 18.01 7.88 196r8'5 29 .3 - -- -- i1 P1. ifL- - nL nn ± n-D -/ TaKL1g LIIto accouunu 1U eliUgrauLul. _tnln Trý 11t-n - - /', 1 - n--- ,1 - - - fl - 19651 Life expectation: PMales - 67.5 years, remales - 70.( years. URBAN, SEMI--UIiBAN AND RURAL POPULATIgON: 1928, 19:PVO, 191- AIND) L96b GENMISUSS Census Population Percentage of Population Year (in thousands) Urban Semi-Urban Rural Urban Semi-Urban Rural 1928 1,932 899 3,373 31.1 14.5 5h.h 19h0 2,412 1,086 3,847 32.8 14.8 52.1 1951 2,880 1,130 3,622 37.7 14.8 47.8 1961 3,628 1,086 3,675 43.3 12.9 43.8 Source: National Statistical Service of Greece. Table 3 ESTIATES QF PERCENTAGE COPIOSITION OF POPULATION (BY LIVELIHOOD) (In Thousands_ 1951 1961 Trital Total Population Percent Poptlation Percent Agricuflture, etc. h281.6 56.1 h220.O 50.3 TMinin and] qrry"-ing 32. n. .. Dwel li n gs a2-:d construction 9...2 Electricityj, etc. 29. f. 7. . c,orm,erce, etc. U6.9 7. 77. . Transport, etc. 357.8 h.7 u27.6 5.1 Services 100.2 13.2 1185.9 ih.1 T o t a 1 7633.0 100.0 838O.0 100.0 Source: Based on population census, 1951 with adjustments for underenuneration of females employed in agriculture and estimates given by a 2% samwple drawn from the census return, 1961. Table 4 POPUIATIOi: ECONOMICALLY ACTI BY DIVISIONS OF ECONOMIC ACTIVITY AND LEVEL OF GENERAL EDUCATION: 1961 (in thousands) With "H.igher" With Secondary With Primary Not Having Finished Economically Economic Activity _ Educatiorn Educati on Education Primary Education Active Total Agriculture, etc. 1.7 20.1 857.2 1076.1 1955.0 Mining and Quarrying 0.4 .1.6 10.0 9.3 21.3 Manuf ac tur ing 4.3 33.2 295.6 147.7 481.0 Construction 0.9 7.3 93.8 64.8 166.8 Electricity 1.1 4.5 9.8 5.7 21.1 Commerce, etc. 7.8 64.4 133.5 57.9 263.6 Transports, etc. 2.6 25.7 86.6 46.3 159.3 Services 81.3 101.5 167.7 92.6 443.1 Others 3.4 30.0 78.8 38.1 152.h T o t a 1 104.5 289.3 1730.9 1538.4 3663.1 Source: Results of the Population Census, Sample Elaboration, Volume III, pp. 27-28. Table 5 04IGRATION ADTD ITS EFFECT ON LABOR S UPPLY May 1961 census Number emgrated during Employed Unemployed Total Jan. 1961-June 1967 and related workers 124,900 2,300 127,200 3,789 Admini strative and managerial workers 28,400 100 28,oo 361 Clerical workers 141,600 1, oo 143,000 4,805 Sales workers 216,L00 3,000 219,400 1,60 Farmers, fishermen, hunters, loggers and related workers 1, 91),100 3, 900 1, 950, 000 33,995 Miners, quarrymen and related workers 17,200 500 17,700 230 Workers in transnort and communication 99,600 6,300 105,900 2,928 Craftsmen, productions process workers, laborers 625,300 59,800 685,I00 111,513 Service, national defense and recreation uorkers 238,900 5,700 244,600 4,902 Workers not classifiable by occupation 17,900 36,400 5h,300 11,708 Others -- 87,500 87,500 88,369 T o t a 1 3,h2h,200 238,900 3,663,100 294,190 Sources: 1961 Census Sample Elaboration and the Ministry of Coordination. Table 6 GROSS DOMESTIC PRODUQT AND.AT (In million drachmas at 1954 prices) Amount % Amount i0 to 196"1-63 1. Agriculture, for- estry and fishin, 18819 V1.1 2q7q 29.7 3.9 2. Mining and quarrying 626 1.1 1105 1.3 8.5 3. Manufacturing 10065 18.2 16012 19.4 6.9 4. Electricity, gas and waterworks 726 1.3 1556 1.9 11.5 5. Construction 2157 3.9 4831 5.8 12.2 6. Transportation 7. Wholesale and retail trade 6551 11.9 9778 11.8 5.9 8. Banking insurance and real estate 1039 1.9 1749 2.1 7.7 9. Ownership of dwellings 2992 5.4 6003 7.3 10.5 10. Public adminis- tration and defense 3598 0.5 4182 5.1 tration services 1756 3.2 2606 3.2 5.8 12. Other services 2435 4.4 3570 4.3 5.6 1-3. Gross domestic product 55178 100.0 82678 100.0 6.0 14. Net income from the rest of the world 1093 369 151. cxross naiona±l± income 56271 86372 6.3 16. Less depreciation 2848 4775 17. Net national Per caDita income (In drachma) 6706 9615 5.3 Source: Based on data in National Accounts of Greece. Iaoe I ANALIS U THE GRUSS EAPEEDTU1RE U Tim EUUNGIf (Million drachmas at 1954 prices) Average of Average of Rate of Increase 1954-56 l9 bl-bj IV54-5b to 1961-6-3 Gross National Product 63,254 98,349 6.5 Net borrowings and net transfers from the rest of the world 4,540 9,918 11.8 Means available for financing gross expenditure of the economy 67,794 108,267 6.9 I. CONSUMFTICU 57,598 83,501 5.5 Private 50,132 74,078 5.7 Public 7,466 9,423 3.4 II. GROSS CAPITAL FORMTION 10,196 24.767 13.5 Private 7,825 18,048 12.7 Public 2.371 6.719 16.0 A. GROSS FDIED ASSET FORMATION 9.652 22.680 13.0 Private 7,128 16,097 12.3 Public 2.82h 6.8 1h7 B. CHANGE IN STOCKS 543 2,086 16.1 Private 697 1,951 15.8 Public -154 135 -- Investments in the ships are included in the above data. To calculate the gross nnital fnrmatinn and gossn fixed agsat formntion Ayniiidina i-n-trofmAnit- in ships, the above data have to be adjusted downward by 743 million and 3,380 million menetively. Source: Based on data in National Accounts of Greece. Table 8 INDUSTRIAL ORIGIN OF GROSS DOMESTIC PRODUCT AT FACTOR COST OF GREECE (In million drachmae, at current prices) 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 Agriculture 17.729 20.093 22.758 25.022 23.513 23.633 23.655 29.118 29.079 32.278 ining and Quarrying 534 599 781 893 933 937 1.023 1.114 1.170 1.269 Manufacturing 9.32 10.521 12.13 12.984 14.186 14.,19 15.859 17.174 18.400 20.250 Puolic Utilities (Electricity, gas, water) 601 672 886 939 1.049 1.212 1.325 1.650 1.853 2.145 Construction 1.938 2.314 2.804 2.849 3.752 4.123 4.935 5.489 5.928 6.310 Transportation and Telecommunication 4.127 4.567 5.106 5.351 5.729 6.056 6.555 7.315 7.870 8.652 Trade 6.170 6.658 8.030 8.411 8.908 8.957 9.305 10.261 11.033 12.144 Banking, Insurance and Rental Estate 930 1.143 1.470 1.471 1.835 1.922 2.157 2.490 2.732 3.C65 Dwellings 2.683 3.160 3.525 3.865 4.525 5.155 5.866 6.585 7.42h 8.338 Public Administration and Defence 3.540 4.091 5.137 5.058 5.673 6.173 6.674 7.174 8.029 8.736 Health and Education 1.692 1.927 2.196 2.309 2.500 2.723 2.986 3.280 3.686 4.015 Other Services 2.325 2.560 2.800 -3.045 3.240 3.490 3.760 4.050 ..280 4.660 G.D.P. 51.611 58.305 67.627 72.197 75.843 78.900 84.100 95.700 101.484 11.862 Source: NaTional Accounts of Greece. Table 9 Si,VIIIGS liVTD SAV.:,,GS W.TE (Billion drachmas at Current Prices) Year Govt. Corporate & Total net Net Net Gross ca- Balance (T+(7) Gross Savings Saving household savings National savings pital for- of goods Domestic ratio savng Incore ratio mation and ser- Product vices 195,4 .7 1.9 2.7 49 .7 5.h 8.h -3.6 h.8 51.6 9.2 1955 1.6 h.h 6.0 56.3 10.8 10.5 -3.1 7.h 58.3 12.8 1956 1.3 5.6 6.9 65.9 10.5 13.4 -5.h 8.0 67.6 11.9 1957 2.0 6.5 8.5 70.7 12.1 15.2 -5.2 10.0 72.2 13.9 1958 2.2 6.6 8.8 73.6 12.0 17.8 -5.5 12.3 75.8 16.2 1959 1.0 8.7 9.7 76.3 12.8 19.1 -h.h 14.7 73.9 18.7 1960 1.9 8.1 10.0 81.3 12.3 24.8 -5.7 19.1 84.1 22.7 196l 3.0 11:.h 1h.h 92.6 15.6 27.8 -6.3 21.5 95.7 22.h 1962 3.h 12.0 15.4 97.5 15.3 20.4 -8.9 19.5 101.5 19.2 1963 n.a. n.a. 28.4 -7.9 20.5 111.8 18.4 Average of 1954- 1956 1.2 4.0 5.2 57.3 9.2 10.8 -.0 6.7 59.2 11.h Average of 1961, 1962-1963 3.2 11.7 14.9 95.1 15.7 28.2 -7.7 20.5 103.0 19.9 etE: Emigrants' remittances and wa-es and salaries are considered as capital transfers. Sources: Based on data in National Accounts of Greece and the Statistical yearbooks. Table 10 PERCENTAGE STRUCTURE OF GROSS FIKED CAPITAL FORMATION, EXCLUDING SHIPS (At current prices) Sectors 1954 1955 1956 -1957 1958 1959 1960 1961 1962 1963 Agriculture, aniial breeding, forestry and fishing 8.5 7.5 8.3 13.3 l4.5 16.3 17.9 17.0 13.8 14.2 Mining and quarrying 1.2 0.8 1.5 2.0 1.7 0.6 0.6 0.6 0.6 1.5 Manufacturing 10.8 10.3 11.4 :13.5 13.1 10.8 10.0 10.5 13.4 12.0 Electricity, gas and water 11.9 10.8 13.2 7.3 7.7 10.6 8.2 7.1 8.5 7.h Transportation and Communication 11.0 10.0 9.h l4.2 16.h 16.3 20.0 19.7 19.8 18.6 Dwellings 40.8 65.5 4l.3 37.1 36.2 33.1 29.8 30.9 30.3 32.0 Public Administration 2.8 2.4 :2.1 2.1 0.7 1.3 1.5 1.1 1.0 1.0 Other Industries 13.0 12.7 12.8 10.5 9.7 11.0 12.0 13.1 12.6 13.3 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Amount in million drachmuae 7,701 9,096 10,859 11,228 15,003 15,553 ld,2,9 20,517 23,122 214,950 S:urce: National Accounts of Greece. Table 11 GENERAL INDEX OF WHOLEZALE PRICES (Base 1952 100) Year Beverages Raw Materials and and and Finished Month General Foodstuffs Tobacco Semi-finished Goods Fuels Goods 1956 1/ 151.3 19.7 158.4 148.0 173.1 141.7 1957 152.2 147.2 159.8 152.0 185.2 144.5 1958 149.0 1"4.2 163.9 143.8 181.0 143.1 1959 150.7 149.5 166.4 140.9 179.8 136.8 1960 153.2 150.4 165.6 150.0 182.2 138.7 1961 155.6 153.7 167.8 151.1 182.2 161.5 1962 154.5 152.0 172.0 18.4 182.0 140.8 1963 163.9 166.2 156.9 147.7 177.3 142.5 169.8 167.4 231.9 154.0 177.5 145.8 1/ 1956 is the year from which the N.S.S.G. has started the compilation of the index. CONSUMER PRICE IDI/ (Base: June 1959 - 100) Year Lcohol Clothing Medical & Education and Beverages and Household Personal and Transport Month General Foodatuffs & Tobacco Footwear Housing Equipment Care Recreation Comunication Miscellaneous 1959 100.7 100.5 100.0 99.9 101.1 99.9 100.3 100.0 106.0 100.7 1960 102.3 102.1 100.9 100.2 103.6 99.9 101.2 100.7 112.8 101.6 1961 104.1 10.8 106.3 99.4 105.1 1.01.6 103.4 103.0 112.8 100.6 1962 103.8 103.1 108.7 98.5 107.1 99.9 108.1 102.4 113.7 100.3 1963 106.9 109.3 112.5 99.3 109.5 100.2 109.0 98.7 114.0 10o0.5 1964 Aug. 106.8 109.0 11.3 97.. 111.0 98.7 110.9 99.4 116.0 99.0 If For urban areas only (i.e., towns ith 10,000 inhZcitants and over in the 195L population census). Source: National Statistical Service of Greece. Table 12 AGRICULTURE AREA OF FARMS Area (hectares) Number of Farms Percent (Thousands) UndOer 1 2Of 2O5 1- 5 573 56.9 5 .10 114 4-L.L 10 -20 26 2.6 20 -50 5 0.5 Over 50 1 0.1 1,006 100.0 Source: Agricultural Census, 1950 AVERAGE SIZE OF FARMS AND DENSITY OF FARM POPULATION Average Size Density of Farm of Farms Population per Sq. Km. Under Area (Hectares) Cultivation Peloponnese 3.1 122 Central Greece 3.7 92 Thessaly 5.3 75 Epiris 2.4 129 Macedonia 3.5 99 Thrace 4.0 lob Aegean Islands 2.2 109 Crete 2.3 106 Ionian Islands 1.9 167 Greece 3.6 104 T A1h1^ n r?l AnnnTTy wMun.' (Thousands) Sex Employers Working on Unpaid Family Hired Vorkers Other Total Om Account worker Males 26.9 6.0 337.1 12.6 0. 76J90.5 Fenales 6.2 76.7 647.0 39.1 0.5 769.5 Total 31i. 775.7 902._ 1ibh.7 1.4 1 195 PercA.-+. 7 K0 9 77 - 1V (in thousand metric tons) 1950 1954 1958 1961. 1962 1963 Wheat 850 1,219 1,786 1,528 n.a. n.a. Mize 195 254 225 228 n.a. n.a. Cotton 79 128 187 288 84 89 Tobacco 58 67 84 74 93 127 Currants 80 75 85 104 109 78 Sultanas 37 38 40 62 85 51 Citrus 121 196 276 482 220 223 Olive Oil 42 124 100 294 56 208 Sources: Statistical Yearbook, 1963 and Ministry of Coordination. Table lh LIVESTOCK POPULATIONS, 190-1961 (In thousands) 1950 1954 1958 1961 Cattla 81 917 1,028 ],(69 Pigs 582 603 631 5h7 Sheep 6, 9O5 8,738 9,255 8,962 Goats 3,710 4,643 6,010 4,603 CHANGES IN PRODUCTION OF AIN LIVSTOC, PpTTrr'q 1oc-11 i/ Meat 74.2 108.5 145.8 148.0 Milkn (neh 2/2 .& 31I.8 3 .1 n.a. Butter 2/ 5.4 8.5 10.4 8.5 / Including larmhouse consumption. 2/ From cows, buffaloes, sheep and goats. Table 15 EXPORTS OF MAIN AGRICULTURAL PRODUCTS (In thousand metric tons) 32oco A QA1 1 9()p 1961 ri o0 AE o ).7 AI -Q Tooacco Lu.7 u. 4., 6+. 6 .9 --9 Currants 74.3 63.5 58.1 69.3 57.8 67.0 70.3 Sultanas 30.0 36.6 i4L 6.2 h.u 1. -. Cotton nil 38.9 46.4 31.2 38.6 64.2 50.8 Citrus Ia.0 3-(4 0.9 214* 7 eQ2 %J. Clive Oil 20.5 9.3 4.2 8.5 0.3 8.1 2.7 Sources: Greek Production and Exports in Figures and Ionth"Ly Bulletins of External Trade. Table 16 CREDIT TO AGRICULTUME AND FISHING (Osa di T the edr-period) Million drachmae 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 GRAND TOTAL 2,546.7 3,229.1. 3,7t9.1 h,t9.8 5,602.0 6,557-. 7,636.5 8,193.9 9,271.9 9,940.9 10,761.8 Short-term Credits Total 1 ,801.6 2,202.2 2,619.4 3,351.7 3,996.1 4,569.4 4,733.6 4,938.1 5,621.9 6,071.0 6,675.8 Cultivation loans 1,018.0 1,337.4 1,562.9 1,877.6 2,139.6 2,567.6 2,866.1 3,113.4 3,269.9 3,076.1 3,750.6 Collateral loans 701.7 775.2 966.3 1,305.5 1,633.6 1,777.2 1,637.7 1,585.8 2,109.8 2,778.6 2,684.7 Other 84.9 89.6 90.2 168.6 222.9 224.6 229.6 238.9 242.2 216.3 240.5 Medium and long-term loans Total 361.1 376.6 435.3 583.1 84.6 1,307.3 1,937.5 2,51h.9 3,061.6 3,168.1 3,1l9.8 For land inpmvement 283.6 300.5 357.7 US'.8 754.3 1,20.9 1,796.5 2,354.L 2,900.2 3,009.5 3,260.9 To fishing industry 77.5 76.1 77.6 88.3 90.3 102.4 lL.0 160.5 161.4 158.,6 158.9 Agricultural._ uplies 381.0 650.3 694.4 560.0 761.3 680.7 965.4 740.9 588.11 701.8 666.2 Outstanding debts to the AEricultural Bank under Settleient 1/ Credits to livestock-breeders are also included. 2/ Credits by the Agric. Bank and credit to the C.C.O. and C.S.A. by the Eank of Greece. Source: Bank of Greece Table 17 STRUCTURE OF IIANUFACTURING INDUSTRY VALUES AND PERCENTAGE COMPOSITION F OUTPUT (GDP) (Million drachmas, at cuirrent prices) 1954 Percentage 1957 Percentage 1960 Percentage 1963 Percentage a. Food, drink and tobacco 2,163 23.2 3,105 23.9 3,375 22.3 4,583 22.6 b. Textiles 1,489 16.0 1,965 15.1 2,103 13.3 2,525 12.5 c. Clothing 1,541 16.5 1,896 14.6 2,190 13.8 2,421 11.9 d. Wood 719 7.7 1,002 7.7 1,157 7.3 1,401 6.9 e. Paper 384 4.1 527 4.1 750 4.7 997 4.9 f. Chemicals 1,031 11.0 1,527 12.6 2,160 13.6 2,896 14.3 g. Stone, clay and glass 477 5.1 732 5.6 774 4.9 1,090 5.4 h. Basic metal industries 157 1.7 288 1.7 355 2.1 416 2.1 i. Metal manufacture en-ineering and electrical goods 947 2.0.1 1,339 10.3 1,924 12.1 2,371 11.7 j. Transport equipment 186 1.9 365 2.8 648 4.1 942 4.6 k. Other manufacturing 248 2.7 298 2.3 443 2.8 608 3.0 T o t a 1 9,342 100.0 12,984 100.0 15,859 100.0 20,250 100.0 Source: National Accounts of Greece Table 18 Goods and i tun1 PasngrTrfi nailways uMUOD nY u Mrtme Goods Passengers Passengers Goods n -- Tds Ton T0n Km Nmue Fas s IM Number Pass Ka inonsa 1n lillions 1992.2 361.4~ 114;' 9985 61.5 1665.2 2.814 1960 2.2 363.2 11.7 1030.2 70.2 1037.4 3.02 1961 2.6 411.3 11.7 1042.9 78.1 2061 3.3 1962 2.6 l3.1 12.- 1160.2 86.3 2366.3 3.33 1963 2.9 446.5 11.7 1065.0 90.6 2773.5 3.37 Average Annual Growth in 1 5 5 0. 3 8 11 6 Vehicles Trucks Buses Pass. Cars Motorcycles Total 1956 21.54o 5653 22700 12051 61904 1961 40.030 6981 48834 33303 129148 1962 44.332 7480 56893 37498 146203 Average Annual Increase in l5 16 20 1! Source: National Statistical Service of Greece. Table 19 PUBLIC FINANCE: CENTRAL GOVERNIENT BUDI' (CONSOLIDATED) (In million cIrachmas) 1959 1960 1961 1962 1963 19641 1965- Current Budget Receipts l,365 15,209 17,651 19,518 21,388 24,630 28,000 Payments 1/ l,160 lh, 945 16,704 17,992 19,982 23,960 27,705 Current Surplus 225 264 947 1,526 1,406 670 295 NATO contribution to Greek defense expenditure 632 7h2 548 504 -- 550 705 Investment Budget Receipts on investment account 426 530 692 637 543 900 1,000 Total receipts 1,283 1,536 2,187 2,667 1,949 2,120 2,000 Payments 3,397 i,122 5,056 5,850 5,C055 5,200 6,500 Total Deficit 2,11h 2,586 2,869 3,183 3,106 3,080 4,500 Financing Deficit Foreign sources 1,060 1,539 1,827 1,588 131 1,275 3,150 Internal sources 1,05h 1,047 1,042 1,595 2,975 1,805 1,350 1/ Estimates as of December 22, 196h. 2/ Budget. 2/ Includes Greek contribution to NATO works of common interest. Sources: Statistical Yearbook of Public Finance and Ministry of Coordination. Table 20 PUBLIC FINANCE: CENTRAL GOVERNMEIT CURRENT EPENDITURE (Million drachmas) 1957 1958 1959 1960 1961 1962 1963 1966 1. Remuneration of civil servants 2,349 2,563 2,755 2,953 3,158 3,454 4,0o o ,943 2. Remuneration of the members of Armed Forces and the public Security Forces 1,829 1,936 2,087 2,176 2,264 2,650 2,68U 2,907 3. Pensions 1,581 1,791 1,924 1,982 2,192 2,335 2,427 2,617 4 Money supports, of which: 696 809 720 716 681 670 1,269 1,792 Provision of fertilizers 70 55 38 15 15 16 10 21 Covering deficit of consumption goods account 170 2h9 65 107 -- 24 90 250 Covering deficit of the account concerning collection of tobacco, currants, and other agricultural products 50 100 LOO 176 76 278 - Covering railway deficit 390 413 473 458 654 456 481 508 5.Subsidies and subscriptions to: 774 930 1,027 1,092 l,"67 1,901 2,331 3,049 Communal health and insurance council 1403 472 506 518 551 699 788 908 Social welfare institutions and organizations 64 69 73 81 510 213 247 351 Other subsidies 307 389 448 1492 765 989 1,295 1,790 6.Restitution of amounts collected on account of third parties: 674 783 656 677 1,230 1,610 1,442 1,612 To municipalities and communes ) ) 347 103 124 In favor of the National Crop and Social Insurance Agency) 674 783 656 677 1,230) 828 851 960 Other restitutions ) ) 435 488 509 7.Expenditure for the participation of Greece in N.A.T.O. 593 ".0 730 713 595 523 527 1,135 For works of common interest 429 380 506 595 451 314 299 975 Other expenditures 164 60 225 118 143 209 228 160 8.Public debt: 279 323 414 .589 724 1,114 1,428 1,612 9.Expenditure for the settlement of earthquake victims 5148 194 106 49 19 25 25 -- 10. Other expenditures 3,066 2,669 2,761 3,007 3,118 2,435 2,443 14,022 Total 13,227 13,240 14,140 14,945 16,704 17,992 19,982 23,960 1/ estimate Source: ]Ministry of Finance Table 21 CJTRAL GOVEIRUST CURRENT EXP?E,1TURES, (Million drachmas) Ministries 1957 1958 1959 1ou 1961 1962 1oj Pariiament 54 66 75 79 81 85 8, Prime Minister's Office 72 91 84 87 159 189 190 General Secretariat for Athletics - 6 43 57 62 60 79 Ministry of Finance 3,715 3,559 4,175 4,374 h,933 5,668 6,133 Ministry of Coordination 196 116 177 183 234 211 239 Ministry of Foreign Affairs 160 175 206 237 210 284 230 Ministry of Justice 268 297 319 334 350 374 408 Ministry of Interior 1,363 1,h25 1,520 1,553 1,790 2,012 2,222 Ministry of Public Works 872 583 368 300 334 354 365 Ministry of Transport 285 322 357 401 414 410 40 Ministry of National Education and Religion 1,118 1,255 1,356 1,513 1,615 1,803 2,064 Ministry of Commerce 241 386 239 287 267 199 786 Ministry of Industry 38 7 55 L2 96 96 116 Ministry of Labor 41 46 48 47 72 75 75 Ministry of Agriculture 317 348 432 409 928 1,353 1,342 MiniFtry of Social Welfare 759 870 922 1,028 1,199 1,366 1,528 Ministry of National Defense 3,653 3,453 3,681 3,932 3,875 3,741 3,941 Ministry of Mercantile Marine 75 85 85 81 85 87 90 Total 13,227 13,240 14,140 14,945 16,704 18,366 20,334 Table 22 PUBLIC FINANCE: CENTRAL GOVERNMENT CURRENT REVENUE (Million drachmas) 1958 1959: 1960 1961 1962 1963 1964 1/ FRO4 DOMESTIC SOURCES 13,901 14,365 15,209 17,657 19,518 21,383 23,907 Direct taxex 2,72h 2,502 2,615 3,222 3,591 3,606 4,175 Income tax 2,057 1,862 1,957 2,415 2,634 2,532 2,957 Income tax of individuals 1,566 1,454 1,513 1,851 1,989 1,889 2,209 Income tax of legal entities 323 245 250 328 369 380 430 Property tax 251 201 240 243 273 312 332 Back taxes and arrears due 397 389 361 355 388 441 489 Taxes in favor of third parties 2/ - -- -- 143 22:2 235 286 Other direct taxes 19 c0 57 65 74 86 111 Indirect taxes 9,345 9,161 10,321 11,883 13,177 14,913 16,613 Revenue from'customs 4,440 4,258 4,635 5,278 5,907 6,481 7,267 Consumption taxes 3,052 3,273 3,5k7 3,765 h,065 h,683 5,162 Transaction taxes 1,645 1,694 1,865 2,05k 2,290 2,650 2,991 Back taxes and arrears due 183 174 206 229 211 376 k07 Taxes in favor of third parties]. 25 61 66 557 671 7,2 806 Other revenue excluding taxation 1,833 2,k02 2,273 2,557 2,750 2,83k 3,119 FROM FOREIGN SOURCES 590 632 742 548 504 -- 705 T o t a 1 11,2 1,997 15,951 18,210 20IO22 21 83 24,612 1/ Estimate / Additional tax on the income of physical persons and legal entities on account of the National Crop and Social Insurance Agency. 3/ In favor of the National Crop and Social Insurance Agency, Tourism, Athletics and other Table 23 COPOSITION OF TAX REVENUE AND TAX-NATIONAL INCOME RATIO (Including Local Taxes) (Million drachmas) r,.: L 7 .1 f 2 - & - M0 1f.. -1tl.. 1 AT 4. I LS , n D-tL r L /o of ToLtc.U ±ILndircu 7o of Totl,J ±loua. ivet Naiona.lt Ta.x-Ico.1ue Ynar Taxes Taxes Taxes Taxes Income Ratio a9 /-- -% - 1 -, -%f -- - - 195o 2,3 (23.9) .,304 (7.1) 12,3UU 73,534 16.7 199 2,663 (21.9) 9,498 (78.1) 12,161 76,218 15.9 1960 2,794 (21.2) 10,354 (78.8) 13,148 81,527 16.1 1961 3,395 (22.2) 11,904 (77.8) 15,299 93,411 16.4 1962 3,739 (22.8) 12,599 (77.2) 16,338 99,126 16,5 1963' 3,750 (20.0) 14,970 (80.0) 18,720 109,778 17.1 1/ Estimates. Source: Statistical Yearbook of Public Finance and National Accounts of Greece. Table 2h CENTRAL GOVERNMINT INVESTMENT EXPEDITURES BY BRANCHES OF ECONOMIC ACTIVITY (Million drachmae at current prices) 1957 1958 1959 1960 1961 1962 1963 1964 1/ 1965 2/ Agriculture 163 150 466 286 235 162 288) .hhh Livestock production, fo:restry and fishing 12 13 - 12h 201 171) = 1,593 297 Land anelioration works 333 2h1 389 632 806 952 1,045) 1,290 Mines, quarries and salt pans - - h 11 34 19 ho 7 118 Manufacturing 587 474 516 542 729 1,304 663 506 232 Transportation (except railways) 345 636 747 1,177 1,h57 1,288 1,487 1,730 2,821 Railways 113 134 172 92 216 243 146 180 303 Tourism, museums and monuments 59 194 232 246 294 596 207 210 350 Education 88 22 63 46 67 173 243 500 758 Building and housing h6 1h8 178 67 66 41 33 1ho 187 Health and social velfare 33 60 50 30 36 53 13) 78 1O Water supply and drainage 31 8 - 2 27 18 2 110 Public admninistration l 71 75 59 62 68 57 100 197 Technical assistance 6 17 28 28 36 26 29 82 105 Works carried out by the departmental authorities 3h5 4lO 460 885 811 560 hoo 250 150 Other 17 19 18 21 57 146 200 624 456 Total 2,218 2,596 3,397 4,122 5,056 5,850 5,055 6,000 7,900 1/ Estimates as of December 1964. 2/ Budget. Sources: Ministry of Coordination, Miinistry of Finance and Center of Planning and Economic Research Table 25 PUBLIC FINANCE: FINANCING OF CENTRAL GOVERNMENT INVESTMENTS (Million drachmas) 1957 1958 1959 1960 1961 1962 1963 196h 1/ Total 2,218,1 2,596,0 3,397,3 ,,121,7 5,055,6 o, 6, A. Domestic Sources 657,1 1,873,4 2,337,8 2,583,1 3,228,9 h,261,8 &,92h,2 4,276,0 1. Special investment revenue 165,9 221,3 426,2 529,6 529,3 636,8 543,1 900,0 2. From Publ:ic Power Corporation -- -- -- 100,0 -- -- 3. Proçeeds1fnom State Loans and Treasury Bills -- 545,0 1,128,5 995,0 1,130,0 2,07h,O 2,100,0 2,276,0 h. Contribution of current budget 202,5 1,042,0 783,0 917,1 1,406,6 1,551,0 1,809,8 1,100,0 5. Bank of Greece advances 288,7 65,1 -- 141,4 - -- 471,3 -- B. Foreign Sources 1,561,0 722,6 1,059,6 1,538,6 1,826,7 1,588,3 130,7 1,724,0 I. Aid 549,7 325,7 598,4 723,9 6h3,9 581,6 72,5 120,0 a. U.S. Government 549,7 325,7 570,7 695,5 625,h 558,8 32,4 61,0 b. International organizations -- -- 27,7 28,5 18,5 22,8 40,1 58,0 2. Loans 1,007,9 345,0 353,4 810,4 1,175,9 540,6 59.2 1,529,0 a. U.S. Government 70h,9 345,0 79,7 -- 353,4 117,7 24,3 359,0 b. German Government 303,0 --- 715,0 792,7 270,9 5,4 -- c. French Government -- -- --- 131,9 16,3 -- d. International organizations -- - 273,7 95,4 29,8 20,1 12,2 1,170,0 3. Special advances by Bank of Greece against non-released aid -- 50,0 105,0 -- 136,4 -- -- . Reparation~s 3,4 1,9 2,8 h,3 6,9 329,7 -- 75,0 1/Es bimates Sources: Ministry of Courdination and Ministry of Finance. ACiLL± .L.J.v o a,_, i~ oanuary- nov eie 1960 1961 1962 1963 1963 1964 A. Payments 3538 3711 3759 4178 3512 5796 1. In foreign currency 1184 1157 594 1371 928 1096 2. In domestic currency 2354 2554 3165 2807 2584 L700 wheat purchases by the Government 1966 1827 2014 1625 1625 3200 olive oil purchases by the Government 7 240 460 309 159 630 other expenditures 381 487 691 873 800 870 B. Receipts 2806 3703 2872 4480 4193 3998 Cash from sales 2124 2252 2044 3009 2743 2522 Deficit financed by Budget 65 107 150 625 624 440 other items 617- 1344 658 847 826 1036 Balance (- = net payments + = net receipts) - 732 - 8 - 887 + 302 + 681 --1798 Debit with Bank of Greece end of period 3550 3558 4445 4143 3763 5941 .qtmrP 'Rank of~ Grrec. ('.OATTTnArPLT) nAT.ATrVC q '.M r r)1~ rri4T. mnvR.rr!APv .Y'TT 1 Oct. ±.7.D7 LYUU ±L70. ±L7UC ±7U_) JYU7V4 A C'r' un Claims in foreign exchange, net 6.1 6.3 7.4 8.1 9.4 7.9 Claims on Government, in- cluding state enter- prises, net 9.9 12.6 14*2 14.6 17.9 22.0 Claims on private sector 23.6 27.1 30.4 35.8 42.0 46.8 Total Assets 39.6 46.0 52.0 58.5 69.3 77.5 LIABnITIES Money Supply of which: 13.1 15.6 17.8 20.5 23.6 27.1 currency in circulation 8.8 10.5 12.2 14.4 16.8 19.3 sight deposits 4.3 5.1 5.6 6.1 6.8 7.8 Other Deposits 15.0 18.0 22.0 27.9 34.2 37.0 Deposits from counter- part funds 2/ 4.2 4.4 4.5 2.1 1.6 1.1 Capital and reserves 4.7 4.9 5.3 6.1 7.1 7.8 Other liabilities net 2.6 3.2 2.8 1.9 2.7 4.8 Total Liabilities 39.6 46.1 52.4 58.5 69.2 77.8 1/ Consolidation of the balance sheets of all banks and special credit institutions. 2/ This account has been credited by the equivalent in drachmas of counterpart funds and debited with withdrawals of the Greek Government and the American Mission in Greece. Source: Bank of Greece. Table 28 FACTORS AFFECTING MONEY SUPPLY (Million drachmas) (+) Money supply increase (-) Money supply decrease January-October 1960 1961 1962 1963 19 A. PUBLIC SECTOR +3,373 +2,357 +1,433 +3,117 +1,047 +3,561 I. Central GovernMent (excluding foreign borrowing and transfer from counter- part funds) +2,923 +2,855 +1,909 +2,32h + 599 +4,882 II. Public Entities - 84 - B67 - 825 - U.9 - 508 -1,310 III. Public Enterprises + 534 + 369 + 349 +1,242 + 956 + 19 B. PRIVATE SECTOR +1,059 + 428 + 659 + 626 + 530 +3,558 I. Loans and advances +3,379 +3,056 +4,889 +5,970 +h,919 +5,106 II. Securities + 169 + 165 + 482 + 217 + 205 - 312 III. Deposits -2,489 -2,793 -4,712 -5,561 -h,594 -1,236 C. FOREIGN SECTOR -1,200 -1,060 + 530 + 355 + 167 -2,061 D. OTHER ITEMS - 753 + 557 + 50 - 985 - 143 -1,592 CHANGES IN MONEY SUPPLY +2,479 +2,302 +2,672 +3,113 +1,601 +3,496 Source: Bank of Greece Table 29 DEPITS KIH TH BAWIAF GRECE (Million drachmae) 1957 19513 1959 1960 1961 1962 1963 Nov. Nov. Individuals and Private Enterprises, Public Enterprises and Public Entities, of which: 3,194.6 3,578.1 4,032.9 24,387.3 5,526.3 6,576.5 6,838.2 6,943.8 7,926.5 Individuals and private enterprises 484.3 511.4 712.6 702.3 750.0 692.5 695.8 603.4 862.2 Public entities 2,619.4 3,ofi.7 3,272.5 3,636.5 h,735.1 5,796.0 6,034.6 6,243.0 6,928.8 Coinercial Banks and Special Credit Institutions: 2,139.2 2,629.9 3,635.8 2,609.0 3,610.1 3,705.1 4,412.0 3,737.8 3,875.1 Commercia. barka 1,264.6 1,731.5 2,692.4 1,676.6 2,296.6 2,489.3 2,57h.1 1,876.7 1,604.8 Non-interest bearing Obligatory 466.0 593.3 762.8 910.3 1,052.9 1,122.4 1,123.2 1,139.4 918.1 Current accounts 112.2 155.4 542.3 268.8 469.5 569.4 520.1 403.2 544.5 Interest bearing Seasonal obligatory 460.8 638.7 891.0 92.3 436.4 hL.5 638.8 - -- For long-term loans 225.6 303.7 426.3 5.2 137.8 279.4 152.9 235.2 16.9 Agricultural Bank of Greece 184.0 175.9 167.2 110.1 153.1 125.5 549.1 539.8 700.2 Consignment and loans fund - Postal Savings Bank 463.1 526.3 487.0 744.7 900.5 867.4 1,094.2 1,103.8 1,478.8 Hellenic Industrial Development Bank and other investment banks 171.1 152.5 218.2 19.8 181.1 16L .3 171.4 202.0 78.3 Mortgage bank 56.4 43.7 70.8 57.8 78.8 58.6 23.2 15.5 13.0 Source: Bank of Greece. Table 30 DEPOSITS WITH COMKERCIAL BANKS AND SPECIAL CREDIT INSTITUTIONS (Killion Drachmas) Nov. Nov. 1954 195 1956 I5 1958 LS 1960 1961 1962 1963 1563 1964 GRAND TOTAL: 3,189.5 4,069.2 5,342.9 9,116.1 11,667.-4 15,278.0 1.8,633.7 22,137.2 27,460.5 34,158.6 33,143.2 37,385.3 Individuals and Private ETE'ises -- Total: 2,249.7 3,102.2 4,318.9 7,611.2 10,031.6 13,627.4 2.6,632.4 19,721.9 24,732.9 .30,649.3 29,726.8 32,857.2 Sight 1,607.6 2,093.5 1,897.6 2,289.2 2,,460.I4 2,928.2 3,462.3 3,846.3 4,108.7 4,447.2 4,484.2 5,143.3 Savings 297.9 522.9 1,757.5 4,102.4 5,770.5 8,543.1 10,834.5 12,863.1 15,525.8 19,824.2 18,928.6 21,667.6 Time 38.4 72.1 226.9 623.5 1,104.6 1,273.4 1,137.1 1,479.2 3,52.4 24,736.2 4,652.3 2,027.7 Restricted 305.8 413.7 436.9 596.1 696.1 882.7 1,198.5 1,533.3 1,556.0 1,641.7 1,661.7 2,018.6 Public Enterrriae - - - 64.9 68.0 91..2 149.0 224.5 134.7 :154.7 165.7 154.6 Public Entities Total: 939.8 967.0 1,024.0 1,440.0 1,567.8 1,559.4 1,852.3 2,190.8 2,592.9 3,3524.6 3,250.7 4,373.5 Sight deposits 170.0 197.5 24.4 320.8 355.9 446.7 561.1 670.2 756.6 860.7 981.3 1,080.3 Time - 324.0 115.3 105.0 108.2 125.3 211.6 330.0 6sl.0 423.9 8824. Other 769.8 769.5 745.6 1,003.9 1,106.9 1,004.,5 1,165.9 1,309.0 1,506.3 1,89.9 1,845.5 2,4o8.5 Source: Bank of Greece Table 31 1/ TOTAL CREDIT BY SOURCE- (Outstanding credits at end of period) Million drachmae Oct. Oct. 1953 1954 1955 1956 1957 1958 1959 196c 1961 1962 1963 1963 1964 GRJD TOTAL 8,215.2 10,510.6 11,576.0 16,634.8 18,630.9 21,963.6 21,667.1 28,695.7 32,387.6 37,836.3 65,265.3 63,867.2 50,651.2 Bank of Greece Funds Total. 4,450.C 5,255.6 5,331.7 6,108.9 7,224.5 8,086.3 8,329.6 9,C9.8 11,028.0 11,503.1 13,093.0 11,970.5 16,353.6 Public entity deposits 803.6 735.6 563.3 1,116.9 1,269.9 1,651.1 1,946.2 1,796.9 2,726.9 3,001.5 3,221.9 3,196.6 3,957.6 Other fincs 3,646.6 4,520.0 6,768.4 4,992.0 5,954.6 6,433.2 6,383,4 7,612.9 8,301.1 8,501.6 9,871.1 8,77L.1 10,396.2 Cormercial. banks funds 1,112.9 2,310.6 2,699.2 h,023.7 6,529.2 8,365.7 9,268,1 11,435.8 12,802.3 16,066.6 20,856.3 20,677.8 22,672.1 pecial Credit Institutions Total 2,475.2 2,701.8 3, 250.6 h4,03>.1 6,328.8 6,936.9 5,997.5 6,810.2 7,627.2 9,638.2 10,606.1 10,625.6 12,976.6 E.D.F.0. 2,200.7 2,172.3 2,335.1 2, 739.2 2,759.5 2,960.9 3,096.8 3,117.5 3,173.5 3,651.7 3,636.2 3,536.7 3,981.1 Agricultural Bank 14.7 265.0 521.0 823.2 918.6 992.8 1,520.2 1,748.4 1,983.1 2,993.8 3,517.2 3,667.3 6,556.6 Mortgage Bank 61.0 72.L 82.9 73.3 146.8 233.3 231.3 210.2 226.6 267.2 301.5 395.6 256.9 Other institutions 88.8 192.1 311. L.00.4 505.9 767.9 1,151.2 1,733.8 2,246.0 2,725.5 3,169.2 3,026.0 6,185.8 Government Ftmds 177.1 242.8 296.7 666.1 568.6 598.7 891.9 1,039.9 929.9 830.6 693.9 773.5 669.1 lf Credits to the Central Government are not included. -Deposits and own capital. Source: Bank of Greece Table 32 1/ TOTAL CREDIT BY SECTORS AND BRANCHES Million drachmae (Outstanding credits at the end of period) October October 1953 195L 1955 1956 1957 1958 1959 1960 1961 1962 1963 1963 1964 GRAND TOTAL 8,215.2 lo,51c.,6 11,576.0 1,63h.8 18,630.9 21,963.6 2h,467.1 28,695.7 32,387.4 37.836.3 b5,2L53 43,8h7.2 50,651.2 Private Sector Total 8,067.0 10,219.3 11,157.7 1,00.5 17,748.3 20,790.7 23,C91.2 26,49h.0 29,570.2 3h,h58.7 4c,L29.2 39,377.5 45:,534.83 Agriculture 2,546.7 3,229.1 3,749.1 4L,L94.8 5,602.0 6,'57.4 7,636.5 8,193.9 9,271.9 9,9h0.9 10,7618 9,977.9 11,592.2 Marnfacturing 3,262.2 L,036.,0 4,258.0 5,325.9 7,127.6 8,613.6 9,208.5 10,910.6 12,145.6 1h,151.1 16,764.9 15,828.8 18,752.- Trade 1,292.1 1,697.8 1,692.9 2,690.2 3,307.h 3,616.5 3,86.8 1,282.7 4,01.6 6,135.7 7,688.9 8,399.5 9,106.8 Housing 139.6 338.1 407.9 466.7 588.9 767.3 1,022.7 1,348.2 1,541.1 1,787.0 :2,026.4 2,083.6 2, 486.8 Other 826.4 918.3 1,049.8 1,062.9 1,122. h 1,235.9 1,376.7 1,758.6 2,130.0 2,h4l.o 3,187.2 3,087.7 3,596.6 Public Enterprises -- -- -- 37.3 3114.3 385.7 533.1 1,019.4 1,299.2 1,513.5 2,669.9 2,363.7 2,657.0 Public Entities 148.2 291.3 18.3 557.0 568.3 787.2 842.8 1,182.3 1,518.0 1,864.1 2,146.2 2,106.0 2,1459.4 1/ Credits to the Central Government are not included. 2/ Credits by the Bank of (reece, commercial banks, the Agricultural Bank, the Economic Development Financing Organisation, the Consignment and Loans Fund and the Postal Savings Bank. Source: Bank of Greece Table 33 iNTERZIT RATES UN BAilF DEPUSIT (Per cent per annum) May July Jan. Jan. Sept. March Oct. Oct. 1956 1957 1958 1959 1959 1960 1961 1964 enterprises 7 6 5 3 2,5 2 1,5 Savings Up to 100,000 Drs. V0. 7r 1 D ~ 4, banks From 100,000 to cu,w 1are. o I yI , CUVJLUU U.,* 0 -, ) 4 ime Depoits individuals and privte enterprises 3 to 6 months 5,5 5,25 l to 2 years 10 10 9 8 7 6 6,5 6 Source: Bank of Greece. Table 34 INTEREST RATES ON BANJK CREDITS (Per cent per annum) March April Oct. April Nov. March April Oct. Jan. Bank of Greece re- discount rate 11 i0 9 7 6 6 5.5 _55 5.5 Industry Bills discounted 10 9 8 8 8 8 7.5 7.5* 7.54 Credits for working capital 10 9 8 8 8 8 8 9* 9* Long-term loans 10 9 7 7 7 7 7 7* 7* Im,Dort and Domestic Trade 10 10 10 10 10 10 10 10 10 Exports and tobacco trade 9 8 6.5 6 6 6 5.5 5.5 5.5 Penalty rates on de- layed repayments 13-15 13-15 13 13 13 13 8.5-13 7-12 7-12 Credits to Farmers Cultivation loans to individual farmers 7 7 7 7 7 6.5 6.5 6.5 5 To cooperatives 6.25 6.25 6.25 6.25 6.25 5.75 5.75 5.75 4.25 Medium and Long-term ioans For irrigation works and livestock -- -- -- 2 2 2 2 2 2 For other investments To individual farmers 8 8 8 8 8 7 7 7 4 To coopentives 7.25 7.24 7.2q 7.Pq 7.Pq 6-24 .Pq 6.2 1.q layed repayments to Agicltu ra1 Bank 19 12 12 12 19 9 9 9 7 o" 0-1 f) O- ) AQ A_ - -Q A a--R " .iL L L L 15. LU U UU JIU L VO VfLtJ%J.L U_L11r, CL AII.LAI1JIL L..U V';_A W -I E %JA. "a On housing loans to civil servants: 6 percent interest. In other special cases: 3 to 6 percent. Source: Bank of Greece. far* <*)1 1,"-.q.T r'C%QTTM CN ^.C' C'T.Y r-rrT 'C knillion drachmas) 1957 1958 1959 1960 1961 1962 1963 Bonds Public Power Corporation 90 490 300 580 740 500 -- Government -- -- 750 -- 990 1,500 Private enterprises -- -- -- 110 22 Total: 90 490 300 1,330 740 1,600 1,522 Shares Banks -- -- -- -- 52 542 -- Enterprises 4 64 7 51 87 50 38 Total: 4 64 7 51 139 592 38 General Total: 94 554 307 1,381 879 2,192 1,560 Source: Bank of Greece. Table 36 jREE,- _ALLL0Z )F ?AitENl,S - 19515-63 (In Millions of U.S. dollars) 1959 1956 1957 1958 1959 1960 1961 1962 1963 A. GOODS AND SFRVICES Exports f.o.b. 206.5 209.6 226.6 246.u 221.6 210.0 234.9 262.6 296.0 Imports c.if. -381.9 483.8 -52L.0 -528.0 -665.1 -520.3 -955.1 -690.3 -758, Trade Balance -175.3 -276.2 -297.h -281.6 -213.7 -310.3 -350.2 47.7 452.6 Transportation 39.5 51.5 69.2 59.5 55.2 70.1 90.8 93.5 109.6 Travel 19.2 18.5 26-3 20.9 26.3 32.6 48.8 54.2 67.9 Government, n.i.e. 19.0 21.0 20.0 19.5 15.2 18.5 Th1.7 11.5 13.1 Other services - 0.6 5.3 9.1 -- 4.5 2.9 - 4.6 - 5.1 5.9 TOTAL -98.2 -181.7 -174.3 -184.6 -1L0.8 -185.6 -206.1 -293.4 -256.1 B. EMIGRANTS' REMITTANCES (INCLUDING WAGES AND SALARIES, ETC.) 50.6 60.9 75.0 76.7 87.1 91.5 106.7 138.1 165.3 C. MISCELLANEOUS TRANSFER PAYMENTS AND CAPITAL Reparations and indemnities 1.9 0.7 0.4 0.2 2.8 0.9 0.9 37.8 6.0 Import credits 12.8 25.6 33.8 18.3 -.L.5 7.8 6.0 31.8 23.2 Commercial bank short-term liabilities 1.9 2.3 7.0 4.7 -1.0 -1.6 5.7 6.9 5.5 Commercial bank short-tem assets (increase -) -4.2 -0.9 -0.6 -1.1 ..0.8 -3.5 -2.6 -8.8 .42.7 Bank loans received and exterded (net) -. - -- -- -- 3.2 -4.0 5.8 4.0 Otner private capital 22.1 21.1 28.6 33.6 67.3 27.5 50.6 63.1 82.3 Repayments on official loans -5.2 -2.8 .3.2 -3.3 -6.6 -5.7 .44.6 -8.1 40.1 Repayments on post-EP) debt (net) and on other consolidated claims -- - -- - 9.9 1.5 1.3 -1.4 - 2.9 TOTAL 33.3 48.0 66.0 52.4 59.1 or 30.? 53.3 127.1 64.3 47.2 0. TOTAL (A THROUGH C) -15.3 -70.0 -31.8 -52.6 -6.3 or -65.7 -66.8 -28.6 --27.5 -8.2 E. OFFICIAL GRANTS AND LOANS U.S. official grants and other relief (net.) 53.6 51.0 3.4 30.2 62.5 0.6 37.3 36.8 35.8 U.S. Government deposits in drachmas 7.0 7.0 2.8 -2.2 -6.0 5.6 -2.3 -5.3 -*2.4 Drawings on U.S. official loans 10.0 15.0 16.6 11.2 16.7 9.8 15.2 13.0 18.0 Drawings on Gennan Government loans -- -- -- -- 12.7 11.1 24.4 -- - Other official grants and loan drawings -- -- -- - 0.8 0.8 9.3 6.8 2.6 TOTAL 70.6 73.0 22.8 39.2 66.7 67.7 83.9 51.3 55.0 F. MONETARY MDVhENTS IM accounts - - - - -15.0 -- -- -- - EPU debit balance - - 1.8 9.8 0.3 -- -- -- - Payments agreements and EMA accounts (net) 1.5 -0.5 -1.3 -13.6 -1.2 7.7 0.6 -9.6 -5.8 Holdings of IBRD bonds (increase -) -- -2.! -1.0 1.0 3.5 1.0 - 0.5 1.0 U.S. dollar balances (increase -) -73.0 -3.2 13.3 21.2 -31.9 100.9 -38.6 -25.5 -35.9 Other short-term assets (increase -) 20.6 -1.5 2.8 -0.5 -5.0 -66.5 22.2 -4.2 28.0 Monetary gold (Increase -) -0.1 1.5 -3.8 -3.6 -6.9 -50.5 -10.8 9.7 -0.1 R. -51.0 -4.2 u.S 2.3 -61.2 -7.3 -26.5 -29.0 -12.8 G. N:11 ERRORS AN4 OMISSIONS -5.1 3.2 -2.8 -0.9 0.8 cr2.7 5.3 -10.7 (.3 -13.7 --.0 :061E;. [ RSilLS 180. 10.1 17.5 161.7 20?7.6 223.5 250.5 205.9 277.9 Sources: Based on data available In IT Balance of Payments Yearbooks. Table 37 EXPORTS BY MAIN CATEGORIES AND BY GEOGRAPHICAL AREAS (Percentages) BY CTEORIES 1955 1956 1957 1958 1959 1960 1961 1962 1963 I. Food and Beverages 23 22 28 32 30 27 26 29 24 (a) Currants and sultanas 14 13 14 u. 14 13 12 12 11 (b) Fruits 2 3 5 4 6 5 7 8 6 II. Tobacco 38 31 39 38 33 35 35 28 43 III. Raw Materials 18 24 14 16 21 20 23 25 20 Cotton 11 114 6 9 12 9 12 16 12 IV. Minerals and Ores 6 8 7 6 7 9 6 6 5 V. Manufactures and Handicraft Articles 2 3 3 2 4 4 3 5 3 Textiles Neg. 1 2 I Neg. 1 1 2 1 VI. Others (Including NATO Procurements) 13 12 9 6 5 5 7 7 5 TOTAL ..00 100 100 100 100 100 100 100 100 VALUE IN KILLIONS OF U.S. DOLLARS 206.5 209.6 222.9 242.8 212.5 208.6 234.3 242.6 295.9 BY GEOGRAPHICAL ARFJS EEC 48 48 142 45 37 33 32 35 30 U.S.Ak. 11 12 15 16 16 16 16 11 22 Eastern Bloc 4 9 12 17 15 22 22 22 21 U.K. 12 12 10 10 11 12 9 11 8 Others 25 19 21 22 21 17 21 21 19 TOTAL 100 100 100 100 100 100 100 100 100 Sources: Based on data in Monthly Bulletins of Statistics and Statistical Year Books. Table 38 IM,PORTS BY GROUPS OF PRODUCTS AND BY GEOGRAPHICAL AREAS (On payment basis as percentages) 1955 1956 1957 1958 1959 1960 1961 1962 1963 Products: Foodstuffs 24 29 20 16 16 19 18 lV 19 Raw Materials 33 30 26 26 26 26 25 25 23 Petroleum Products 12 10 13 10 11 10 8 8 7 Capital goods 11 1 11 18 18 16 18 22 19 Including ma- Transport equip- ment (2) (2) (2) (4) (3) (3) (4) (6) ) Consumer manufac- tures 20 20 30 30 29 29 31 31 32 Total 100 100 100 100 100 100 100 100 100 Value in millions of dollars 352.0 440.7 475.1 491.5 454.8 497.1 561.2 608.1 708.L II. By Geographical Areas: EEC 42 36 40 43 42 40 41 47 42 U.S.A. 25 26 19 14 15 17 16 13 17 Eastern Bloc L 4 6 7 10 12 11 10 9 Sterling Area 18 16 14 16 14 12 12 12 13 Others 11 18 21 20 19 19 20 18 19 Total 100 100 100 100 100 100 100 100 100 Note: The shares of foodstuffs and capital goods and that of U.S.A. and EEC countries would be higher if we had cincluded the imports under PL 480, 665. 2687 and suppliers' credits in the total. Sources: Based on data in Monthly Bulletins of Statistics and Statistical Yearbooks. Table 39 REDIONAL DISTRIBUTION OF EXPORTS BY COUNTRIES AND COMIMOIZTY GROUPS, 1962-1963 (Percentages) Common Market USA Eastern Bloc Others Commodity Group A B A *B A 8 A B I. Food and Beverages 24.6 30.7 12.2 8.1 26.3 21.6 3h.9 39.6 a) Currants & Sultanas 10.6 29.9 2.1 3.2 6.9 12.9 21.0 54.0 b) Olives & Olive oil 2.3 19.5 5.1 22.6 6.1 33.2 3.2 24.9 c) Citrus Fruits 0.8 7.1 -- -- 11.2 63.9 3.7 29.0 d) Fresh Fruits 6.0 67.8 -- -- 0.3 neg. 4.1 32.0 II. Tobacco 39.7 35.3 68.1 32.1 29.4 17.2 19.1 15.4 III. Raw Materials and Semi-manufactures 18.2 26.7 8.1 6.6 16.2 q.1 21.q n.6 a) Raw flotton 9.6 23.0 -- -- 27.~ 42L7 1I.A 3h.3 b) Hides and Skins 2.8 25.1 1.0 4.6 7-4 43.6 3.3 26.7 IV. Ores and Metals 8.9 49.5 4.5 13.2 3.6 13.2 4.8 24.1 a) Bauxite 2.6 46.7 neg. 1.0 3.1 36.4 1.0 16.9 bdl Magesite4- 1 0 )1 0iR~ 1 )i .,~ ' 1 craft Products 1.4 11.7 3.4 15.2 0.7 3.7 9.2 69.4 a) Textiles & Yarns 0.4 6.9 1.6 16.4 0.2 1.9 4.3 74.68 VI. Others (incl. NATO supplies) 7.2 37.6 3.3 9.2 3.8 13.3 8.-4 39.9 TOTAL 0.0100.0 100.0 100.0 Amount in $ million 87 4 ( 7y As 6 of total exports 32.3 17 17.1 21.3 29.3 A: Commodity exports as a percent of total exports to a country group. B. Commodity exports AS A PERCENT OF ITS TOTAL. Source: National Statistical Service or Greece. Table h0 REGIONAL DISTRIBUTION OF IMPORTS (ON PAYMENT BASIS) BY COUNTRIES AND COMMODITY GROUPS 1962-63 Common Market USA Eastern Bloc Others A B A B A T A B Commodity Group Agricultural Products 6.2 26.1 25.8 23.4 16.6 2h.o 14.7 44.7 = 100.0 Raw Materials 28.,6 10.0 20.2 25.7 52.2 6.3.77933.6 =100.0 Fuels 1.3 24.9 22.2 3.5 7.7 49.9 27.6 14.8 = 100.0 Capital Goods 26.2 18.1 11.7 16.3 56.1 13.4 5.4 25.1 =100.0 Manufactured Consumer Goods 37.5 20.9 20.1 30.9 52.7 10.1 6.1 31.1 = 100.0 TOTAL 100.0 100.0 100.0 100.0 Amount in $ million 289 100 62 207 As a I of total impOrts 43.9 15.2 '. 32.7 = 100.0 A. Commodity exports as a percent of total exports to a country group. B: Commodity exports AS A PERCENT OF ITS TOTAL. Source: National Statistical Service of Greece.