Greece - Current economic position and prospects

RETURN TO RESTRICTED REPORTS DESK rILr rOPY Report No. EA-166b WITHIN LIUW ONE WEEK This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as represeAting their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION CURRENT ECONOMIC POSITION AND PROSPECTS OF GREECE February 9, 1967 Europe and Middle East Department CURRENCY EQUIVALENTS U.S. $1 Dr 30 Dr I = U. S. $0. 0333 CURRENT ECONOMIC POSITION AND PROSPECTS OF GREECE TABLE OF CONTENTS Page Map Basic Data Summary and Conclusions I. INTRODUCTION ............................................. 1 II RECENT CHANGES IN PRODUCTION AND USE OF RESOURCES ........ 1 Production ...........................................1 Capital Formation ....................................... 2 Employment, Wages and Prices ........................... 3 III. THE SHORT-TERM ECONOMIC PROBLEM ................. ........ 3 IV. THE LONG-TERM DEVELOPMENT PROBLEM ........................ 4 V. DEVELOPMENT PROSPECTS IN MAJOR SECTORS ................... 6 Agriculture .......................................... 6 Manufacturing Industries ............................. 8 Tourism .............................................. 11 Transport ............................................ 13 Power ................................................ 14 Health and Social Welfare ............................ 15 Education ............................................ 15 VI. GOVERNMENT POLICIES AND MOBILIZATION OF RESOURCES ........ 15 Money and Credit ..................................... 15 Public Finance and Taxation ................ .......... 17 Public Investment and Its Financing .................. 19 Balance of Payments ........................ .......... 21 VII. PROBLEMS AND PROSPECTS ................................... 23 VIII. STATISTICAL APPENDIX...................................... This report is based on the findings of a mission to Greece in April-May 1966, composed of Messrs. C. H. Thompson, E. F. Schaad, A. Nowicki and A. T. Schumacher of the Bank and Messrs. J. Ashton (Consultant), W. Allan (Consultant), J. Hancock and W. Lumholtz of FAO. G R E E C ㅌ ―긱 끄LC[Hr二뻐 R 1 9 卜 「 l 너 R]. 1 9 2 」 BASIC DATA Area: 131,000 square hilometers tion (1964): Popu,l 8.5 million Rate of growth (1954-1964): o.9% Density (per square mile): 103 Density (per square mile of arable land): 309 Political status: Kingdom. Member of U.N., NATO, OECD, GATT and associate member of EEC. Gross national product 1965 (estimated): 166.6 billion drachmas 1965 1958-1964 Rate of Growth- 8% 7% P.a. Per capita, 1965: $650 Gross domestic product at factor cost 1964 (preliminary): 125.7 billion drachmas of which, in percent Agriculture: 28.0 1-lining: 1.2 Manufacturing: 18.3 Construction: 6.1 Other: 46.4 Percent of G.D.P. at market prices 1964 1958-1964 (average) Gross investment 28.7 20.1 Gross savings 15.2 j-4.o Balance of payments Current account deficit 13-1 6.1 Investment income payments n.a. n.a. Government current revenue 19.7 17.1 Resource gap as % of investment: 1964 1958-i964 (average) 47.0 30.3 - ii - Honey and credit (billion drachmas) 1961-1965 1965 Increase p.a. Total money supply 32.3 165 Time and savings deposits 29.8 26% Commercial bank credit to private sector 24.5 15% Other lending to private sector 26.4 13% Rate of increase Consumer Price Index 1965 1960-1965 5% 2.9% p.a. Public sector operations (million drachmas) 1965 1960-1964 Increase p.a. Government current receipts 28,180 11.8% Government current expenditure 28,100 12.5% Surplus 80 - 1965 1961-1965 Increase p.a. Public investment expenditure 5,360 5.4% External public debt ($3 million) 1965 1962-1964 Average Total debt (year end) 420 n.a. Total annual debt service 38 20 Debt service ratio (N of merchandise exports, tourism and international shipping) 7 5 - 111 - Balance of payments ($ million) 1965 1960-1965 Increase p.a. Exports 331 10% Imports 1,030 15% Wet services & current transfers 430 15% Current account balance (-) 270 - 1965 1960-1964 Average Commodity concentration of exports: Currants & sultanas Tobacco 56.25 64% Raw cotton & leather Gross foreign exchange reserves 250.3 272.6 (or 3 month's (or 5 months' imports) imports) I.M.F. Position ($ million) 1966 Past average Quota 100.0 6o.o Drawings External financial assistance ($ million) 1965 1961-1965 (Average) Commitments Disbursements Commitments Disbursements Soft assistance n.a. 14.1 n.a. 38.2 Hard assistance n.a. 6o.1 n.a. 42.1 Total n.a. 74.2 n.a. 80.3 Major donors: U.S. n.a. 42.9 n.a. 44.2 Other n.a. 31.3 n.a. 36.1 Summary and Conclusions 1. Changes in the political environment after the electoral victory of the Center Union Party in 1963, the political crisis in 1965 and the weak parliamentary position of the present Government have hardly affected real growth of the economy, which continued at an annual rate of about 8%. 2. Structural changes and institutional improvements to promote growth have in recent years been limited. The traditional pattern of em- ployment has changed slowly. Agriculture, heavily subsidized and relying strongly on traditional products, is still holding a dominating position. Manufacturing has been unable to absorb a significantly higher proportion of the labor force, despite the various incentives offered and the establish- ment of a number of new industries with the help of foreign capital. To promote the modernization of the economy, a Five-Year Economic Development Plan has been prepared. 3. With overall expenditures of the economy increasing faster than available resources, inflationary pressures noticeably increased. Tax reductions accompanied by a continuing increase in current budget expendi- tures resulted in a smaller surplus in 1964 and its elimination in 1965. Central Government investment expenditure had to be cut despite borrowing from the Central Bank. In addition, Central Bank credit was used increas- ingly to finance price-guaranteed agricultural products stockpiled by the State. 4. The general expansion of incomes was further promoted by increased pressure for higher wages, due to a basic change in the labor market, where the large and rising emigration of workers to Western Europe has reduced unemployment substantially. Prices started to rise more rapidly, along with a deterioration in the balance of payments. 5. The effects of recent developments were reflected in a sharp in- crease of imports. The moderate growth of merchandise exports and continued substantial improvements in receipts from tourism, international shipping, remittances from workers abroad and capital transfers were not sufficient to avoid a decline in foreign exchange reserves. 6. Recent steps taken by the Government to restore internal and ex- ternal equilibrium and to provide the basis for continued economic growth include monetary and fiscal measures. These measures should encourage savings and in particular enable the current budget once again to yield a substantial surplus. Debt service payments on all existing external public debt reach their maximum in 1966 when they should be equivalent to about 7% of foreign exchange earnings, and provide scope for Greece to assume addi- tional external debt obligations. CURRENT ECONOMIC POSITION AND PROSPECTS OF GREECE I. INTRODUCTION 1. The "Economy of Greece", Report No. EA-151, dated June 3, 1965, describes the general setting and the main characteristics of the Greek economy and points out the successful stabilization of the economy after the civil war and the subsequent recovery and expansion of production. 2. The political environment has changed since the Center Union Party of George Papandreou came to power at the end of 1963 and gained a sweeping majority in the general elections in February 1964. United in opposition to the previous regime of the Radicals under Mr. Karamanlis, diverging interests within the Center Union soon became visible. In addition, the relationship between the Government and the Crown became a source of conflict. The crisis came to a head in July 1965 when the King refused to accept the nomination of Prime Minister Papandreou for the Defence portfolio and rejected his plea for immediate elections. After the defection of many Center Union Deputies, a Cabinet was formed in September 1965 by the former Deputy Premier, Mr. Stephanopoulos, and approved by Parliament. He obtained a small and uncertain majority with the support of the Radical Party, the previous opposition. 3. The Government Party, with only 40 seats out of a Parliament of 300, depends entirely on the support of the Radicals with 99 seats and the votes of the small fractions of Progressives and Independents. The Center Union Party still commands 121 seats and forms, together with the Communists, an opposition of 143. Despite expectations to the contrary, based on the high popularity of Mr. Papandreou, the Stephanopolous Admin- istration has so far survived. The Government Party and the Radical Party are attempting to avoid early elections, hoping that the Center Union Party will show further defections and disruptions. II. RECENT CHANGES IN PRODUCTION AND USE OF RESOURCES Production 4. The economy grew at an average annual rate in real terms of about 6% in the late 1950's and the early 1960's. The expansion was even more rapid in the recent past and was hardly affected by the emerging political difficulties. Real gross national income (at 1958 prices) rose by about 87 in 1965 compared with 8.5% in 1964 and 9% in 1963. The respec- tive rates of increase at current prices were 11%, 12.5% and 11.5%. 5. No spectacular changes have occurred in the contribution of the broad sectors of production to the supply of resources. The long-term trend of a declining share of agriculture in the domestic formation of - 2 - incomes has continued. Industry as a whole has increased its contribution, leaving the balancing item of a large sector of various services virtually unchanged. Agriculture's contribution in 1965 declined to 26% from an average of 28.5% in 1961-63, whereas industry's share increased from 28% to 30% and services changed slightly from 43.5% to 44%. 6. Agricultural production increased by about 4% in 1964 and 1965, compared with 9% in 1963. The fairly large fluctuations from year to year in agricultural output in earlier years, due to the olive cycle, was smoothed out in recent years, mainly because in 1964 an exceptionally good olive harvest for a trough year coincided with a bumper wheat crop. Furthermore, tobacco output declined by 9% in 1965, a peak year in the olive cycle. 7. The expansion of industry's share (manufacturing, mining, gas, electricity and construction) in domestic product was partly due to the increased output of manufacturing, which rose by 8.5% in 1965, compared with 11% in 1964 and 9% in 1963. The slower growth was chiefly the result of reduced tobacco processing, in direct relation with a smaller crop. The continuing rapid expansion of construction (11.5% in 1965 and 13.5% in 1964) provided a powerful stimulus for manufacturing of metal products and building material. The rate of increase in the service sector declined slightly from 8.5% in 1964 to 7.5% in 1965. Capital Formation 8. The outstanding feature of the economy on the demand side in the recent past has been a vigorous expansion, which exceeded the creation of real available resources. Gross expenditure of the economy at current prices rose by 14.5% in 1964 and about 13% in 1965. Preliminary estimates indicate that while the rate of growth of total consumption increased from 11% in 1964 to more than 12% in 1965, the rate of expansion of gross fixed capital formation declined from 25% to about 16%. 9. In real terms gross fixed capital formation, excluding the trans- fer of ships, increased by about 18% in 1964 and 14% in 1965. The consid- erable rise of real investment was almost entirely due to the high rate of expansion in private fixed capital formation, which increased by 25% in 1964 and 19% in 1965. In particular, investment in manufacturing, mining and quarrying increased by more than 30% in both 1964 and 1965. A sub- stantial part of this increase is attributable to the establishment of large new industrial complexes, like Esso-Pappas, Pechiney producing aluminum and a new fertilizer plant. Investment in housing, accounting for about 47% of total private investment, was still very dynamic. The real growth rate was 21% in 1964 and 14% in 1965. 10. In contrast to the rapid expansion of real investment in the private sector, capital formation in the public sector has hardly increased and has barely reached the level of 1962. After a decline of 6.5% in 1963 it only increased by 3.5% in 1964 and 3% in 1965, and the small increase - 3 - was only brought about by a substantial rise of investment by the Public Power Corporation, while the creation of other basic infrastructure by the Central Government declined. Employment, Wages and Prices 11. Both the general performance of the economy and fragmentary employment data strongly suggest that the demand for labor has steadily increased in recent years, although actual employment may not have grown to a large extent. The number of registered unemployed has been falling steadily since 1960, while in the last two years the average number of hours worked per week has been increasing. These tendencies have been strongly influenced by large and still rising emigration, particularly to the industrialized Western European countries. Emigrants in 1965 numbered about 117,000, compared with 105,000 in 1964 and 100,000 in 1963. It is estimated that returning emigrants brought down net emigration by about 25%. 12. The available evidence points to an accelerated rise of wages in the past two years, although comprehensive data on wages and salaries actually paid are not available. Social insurance data covering a limited number of industrial enterprises show wage increases of 7.4Z in 1965, com- pared to 6.7% and 5.9% in 1964 and 1963 respectively, and the new national collective agreement increased minimum wages as from January 1, 1966, by between 17.2% and 23% for adult workers. Increased fringe benefits were a further element in the rising cost of labor. 13. Higher import prices, measures to protect agricultural incomes, higher labor costs and the climate of excess demand generally, favored an accelerated but still moderate rise of prices. While the rise of wholesale prices averaged just under 4% in the last three years, without showing a faster upward trend, consumer prices rose by 5% in 1965, compared with 1.5% and 1.3% in 1964 and 1963 respectively. III. THE SHORT-TERM ECONOMIC PROBLEM 14. The crucial element in economic developments in the recent past was the gradual moving apart of total available resources on one side and overall demand on the other side. Growth and stability, which Greece enjoyed for almost a decade after the devaluation in 1953, was disturbed as early as late in 1963. The new Government took steps to honor its election promises. Reduced taxation was paralleled by increased current expenditures on two main fronts: increased subsidies to agriculture and higher salaries for civil servants. The surplus in the current budget which had reached its peak in 1963 disappeared entirely in 1965. 15. In addition, budgetary accounts understate the expansionary effects of the Government's endeavours to support farm income. Surpluses of agricultural products enjoying guaranteed prices are prefinanced through special accounts (wheat through the Consumer Goods Account and tobacco through a Tobacco Merchandising Board). Only realized deficits on these products enter the budgetary accounts, while the major part of the subsi- dies actually paid in the last two years has a counterpart in stockpiled goods. In addition, Government investment expenditure has been financed by Central Bank Credit to an increasing extent. 16. The general expansion of incomes was further promoted by a fundamental change in the labor market. Unemployment was disappearing rapidly with large-scale emigration and the continued expansion of the economy. Thus, a powerful element was added by increased pressure for higher wages to higher incomes of farmers and higher salaries for civil servants. 17. This increased overall demand meeting inadequate available re- sources resulted in price rises and a sharp increase of imports, particu- larly consumer goods. The disequilibriating effects were most obvious in the rapidly deteriorating balance of payments. Despite a substantial improvement in the balance of invisibles, the widening discrepancy beween overall expenditure of the economy and the available domestic resources was therefore reflected in an increasing deficit on current account, totalling $270 million in 1965 compared to $205 million in 1964, and an average of $92 million in the three-year period 1961-63. The inflow of capital - mainly private - and a further increase in suppliers' credits were not sufficient to restore the balance. The decline in foreign ex- change reserves was further amplified by the revival of the old preference to hoard gold sovereigns as a hedge against inflation. Official gold and foreign exchange holdings declined further by $31 million in 1965 to $235 million (excluding IMF tranche and gold sovereigns), covering about 3 months' imports. 18. The need to bring Government spending back into line with revenue is at the root of the problem to restore economic equilibrium. Symptoms of excess demand still remain. Despite measures to limit public expendi- ture and to increase taxation, budgetary difficulties have not been completely eliminated and the balance of external payments is not yet fully restored. Foreign exchange reserves have not been built up to the expected extent in the first months of 1966, despite drawings on a credit of EMA and policy changes limiting the conversion of drachmas into gold sovereigns. IV. THE LONG-TEEM DEVELOPMENT PROBLEM 19. Economic growth in the past depended heavily on external factors, particularly the inflow of resources from abroad by public and private capital. In addition, American aid has been replaced to some extent in recent years by the repatriation of Greek refugee capital and by a rapid increase in emigrants' remittances. At the same time, receipts from tourism and shipping have increased substantially, while growth of foreign exchange earnings from traditional Greek export products has been limited. - 5 - 20. The use of resources on the other hand has been largely devoted to the construction of housing, forming by far the largest single part of investment. Development of agriculture, industry and commerce proceeded on a much smaller scale, and structural changes and institutional improve- ments in order to promote continuing growth have been limited. Little progress has been made in creating viable agricultural holdings on the basis of a production structure geared to the forces of the market. Although agriculture has contributed heavily to the long-term growth of overall pro- duction, it has continued to rely on traditional export products unlikely to be favored by market conditions in the future. In addition to improve- ments in technique, apparent progress was partly based on transfers from other parts of the economy by subsidizations in a multitude of forms. 21. As a result, the traditional patttern of employment has hardly changed over a long period of time, with agriculture holding a dominating position. Manufacturing has not employed a higher proportion of the labor force. Despite the virtual disappearance of outright unemployment by increasing emigration, widespread underemployment in agriculture and low productivity elsewhere have persisted. Questions of economic opportunity, income distribution, social security, higher and professional education have become more and more prominent in Greece, and the need for a rapid increase in the standard of living and a more equitable distribution of incomes became more pressing. Income per head in Greece is only about a third of that in the highly developed countries of Western Europe. Although information showing the inequalities of income distribution is incomplete, the unequal standards of living of social groups in the different regions of the country as well as in the different sectors of economic activity are apparent. 22. In order to cope with these long-term deficiencies, the Govern- ment in 1964 commissioned the Center of Planning and Economic Research to prepare a Draft Five-Year Economic Development Plan for the years 1966-70. The Draft Plan is presently being reviewed by a Government committee. 23. The authors of the Plan are well aware of the fundamental problems Greece is facing in its development effort. The general objective of the Plan is, therefore, to accelerate the overall rate of growth in order to narrow gradually the gap between incomes in Greece and Western Europe, and at the same time to redistribute incomes in favor of the poorer classes of the society. To achieve this, the aim is to change the pattern of output in favor of products with better future demand prospects at home and abroad, with investment directed towards industries and branches of industries with high productivity gains. High priority is given to public investment for education and economic and social infrastructure to contribute to the modernization of the economy. It is proposed that the Greek economy will continue to be based on private enterprise, to which the State will con- tribute by eliminating restrictions, providing, apart from infrastructure, a favorable environment and positive support by administrative reforms and direct action. - 6 - 24. The Greek development program is basically an indicative plan in macroeconomic terms. It aims at an average annual rate of increase of gross domestic product in real terms of 7% to 8% over the five-year Period 1966-70, from Drs. 139 billion in 1965 to Drs. 199 billion in 1970. To achieve this goal it is estimated that the allocation of available resources to capital formation will have to be stepped up from 22.9% in 1965 to 25.6% in 1970. A continued, although slightly slower increase in the inflow of resources from abroad is assumed, which implies that 90% of total invest- ments will have to be financed by domestic savings. 25. The targets set out in the Plan appear to be ambitious in view of both the short-term implications of recent developments and the longer- term impediments given by the present administrative, institutional and social structures of the Greek economy. Although the projected overall growth rate seems consistent with recent performance, it has to be recog- nized that the past two years have seen excessive drawings on foreign exchange reserves and inflationary public spending. The need to restore the external balance and an adequate level of Government savings which became a major problem only recently, has not been anticipated by the planners. In addition, the Plan has yet to be brought in final shape for Cabinet approval, although the first year of the assumed Plan period has almost gone by already. 26. This points to fundamental shortcomings in the Greek planning exercise: the machinery for a continuous adaptation of planning to changing circumstances hardly exists. The preparation of projects of the public sector is generally weak and a mechanism by which priorities would be de- termined is lacking. Furthermore, reflecting the present state of project implementation, phasing out the Plan over time is lacking. Only global figures for the whole Plan period are provided and no attempt is made to determine expenditure for specific projects for shorter periods within the five-year period. In addition, the operational relevance of the Plan is doubtful for still another reason: the broad policy measures proposed by the planners will have to be worked out in detail before the necessary legislative actions can be taken. This is obviously a time-consuming process, particularly for a Government with uncertain parliamentary support. V. DEVELOPMENT PROSPECTS IN MAJOR SECTORS Agriculture 27. The central role of agriculture in the Greek economy is evidenced by the fact that an estimated 45% of the total working population is en- gaged in this industry, contributing about 26% to gross domestic product. However, the forces which are changing the economic and social structure are increasingly making inroads into the traditional forms of farming, creating a state of transition from which a new economic pattern is grad- ually emerging. 28. The size of farms is small and reflects the pressure of the rural population on limited land resources. Under agrarian reform measures, land has been allocated in small amounts and the result is that the average size of holding is under 4 hectares. While there is some dispersion around this average the predominant unit is extremely small and there are com- paratively few farms of sufficient size to have long-term prospects of providing incomes comparable with those in other occupations. The diffi- culty of small sized units is aggravated by a high degree of fragmentation which greatly limits the improvement of productivity. 29. Agricultural production has increased at an average annual rate of about 4% over the last decade, compared with a growth rate of about 6% for the economy as a whole, and its share of total production of the economy declined from about a third in the mid-fifties to less than 30% in recent years. Although new cropping patterns have developed with the introduction of new techniques and the expansion of irrigation, the empha- sis has been on increased yields and output of traditional cash crops. Wheat and tobacco, price-supported by the Government, are still the principal sources of income but promising developments have taken place in the production of fruits and vegetables, and fodder crops. Cotton production, which had been increasing rapidly in the early sixties, declined in recent years, partly as a result of increased labor costs for thinning and handpicking. A pattern of mixed farming with livestock production integrated with cropping and geared closely to the availability of labor on the farms and the needs of the market has yet to emerge. 30. Although agricultural output is expanding to meet new export demands as well as to meet changing domestic needs arising from increasing incomes, the current pattern of production is not in balance with present and prospective market outlets. There are only limited possibilities of expanding exports of the main crops and adaptation to the growth of demand for other products, has been slow. Thus, exports of such traditional crops as tobacco and currants increased at an annual rate of about 3% in recent years, while exports of fresh fruits, sultanas, hides, early vege- tables and bulk wine, all products with relatively high income elasticities of demand, rose at rates exceeding 5%. On the other hand, imports of meat, other livestock products and feedgrains have increased rapidly. Agricul- tural exports account for about 80% of exports of goods, but for less than 30Z of total foreign exchange earnings. 31. It is perhaps not surprising, given the promising success in expanding markets of a number of new crops depending on irrigation, that investments were largely directed towards irrigation projects. Overall investment in agriculture has increased less than total fixed capital formation, reducing its share to little more than 10% from the high of about 17 in the early sixties. Although public investment expenditure in agriculture as a whole has been declining in recent years, expenditure for irrigation works, which is by far the largest part, has increased at the expense of marketing facilities, research, education and extension services. However, the deteriorating fiscal position and large commitments for projects already begun resulted in expenditures being thinly spread over many projects, many uncompleted and a long time before yields. - 8 - 32. The Agricultural Bank of Greece is almost the sole source of credit for agriculture, the principal supplier of farm requisites and the main provider of funds for processing industries. It has close ties with the Cooperative Societies which act as its agents. Their members take up about 70% of the Bank's loans which amounted to Drs. 9 billion in 1965. The amount outstanding has increased by about 10% p.a. in the recent past and had reached Drs. 12.5 billion at the end of 1965. Little discrimination is exercised in credit policies, and there is a strong undertone of social purpose. Some 90% of farmers avail themselves of short-term credit annually. Medium- and long-term loans, while increasing year by year, have declined in the last five years from 21% to 18% of total lending. Interest rates, varying between 2% and 6%, are as a rule well below charges to industry and trade. The repayment record deteriorated generally in 1965, especially on medium- and long-term loans to the cooperatives. 33. Agriculture relies heavily on protected and subsidized markets. A wide range of price support and subsidy measures, implemented behind high tariffs, insulate the industry from international competition. Govern- ment support for agriculture now exceeds the equivalent of Drs. 2 billion annually. This is equivalent to an average of about Drs. 2500 a year per farmer and amounts to more than 7Y of total public expenditure on current account. Contingent liabilities for the wheat, tobacco and sultana sur- pluses are likely to increase the support burden in the immediate future. Since farmers pay little or no direct tax and indirect taxation bears more heavily on the urban community, these support payments represent a large transfer of income to agriculture from other sectors of the economy. 34. The need for reforming Greek agriculture has become more pressing in the context of the country's formal association with the Common Market. Under the Treaty of Athens (1962), the intention is to achieve complete harmonization of policies for agricultural products. Once a common tobacco policy is achieved, the benefits to Greece of preferred entry into the EEC may be considerable. Manufacturing Industries 35. The output of manufacturing industries in recent years has con- tinued to increase somewhat faster than in the economy as a whole. In terms of value added in constant prices, the average annual increase in the last decade was about 7%. The general index of industrial production in- creased by 8% in 1965, compared with 10.5% in 1964 and 7.5% in 1963. Fluctuations in the rate of growth from year to year have mainly been due to swings in tobacco processing, in direct relationship to the volume and quality of the annual crop. If tobacco is excluded from the index, the real rate of growth was fairly steady at about 10% in the past few years. 36. Although a number of newly established industries and some other branches have recently registered spectacular growth rates, the overall picture of a relatively moderate growth in relation to other sectors of the economy has hardly changed in the last decade. The contribution of manu- facturing to gross domestic product in current prices has only slightly -9 - increased from about 18% in 1954 to 18.5% in 1964, and the proportion of employment in manufacturing of about 12% of total employment remained virtually unchanged. The very slow growth of manufacturing employment, which was less than 1% per annum over the last decade, has not created alternative employment opportunities for people presently engaged in agri- culture. 37. Manufacturing is still an industry of predominantly small units, although many new larger units have been added in recent years. The pro- portion of the industrial labor force employed in establishments of less than 20 employees had fallen from 63% to 58% between 1958 and 1963. At the same time, the emphasis of expansion, mainly of new industries, was on capital intensive production processes. This is reflected in the number of horsepower per person employed, which has increased from 1.8 in 1958 to 2.5 in 1963. 38. Snme encouraging developments have taken place recently with the establishment of a nu§uwr of lavgw industrial units which, it is hoped, will bring about not only fas7r grcwth of manuscturing industry, but also speed up the structural change from small units in traditional fields to modern and large:: entcrpriss with better prospects for rapid develop- ments. The oil rvfWry, pr3ductioo of pctrocbontcals and fertilizer in Salonika, the alumnn plant ncar DzIphi, the ferMilizer plant in Nea Karvali, a nickol plant, have alrecay started or will begin operations in the course of this year. 39. It is expected that these develo7nents will gradually bring about a significant ch7wje in the structure of r:nufonturing. Prwgress in this direction so far has been very slow indcnd. Alhiugh inveskmant goods industries have been growing on the an-L so at .lout 12% a year, inter- mediate goods iniustrins at 77K and coIuswar goodO at 00 in the sixties, the share of investment goods inustries only amounted to 28% in 1964. 4o. ilanufacturing industry's basic weaknesses are reflected in its failure to gain a largor share of the domnstic market. Grcee's dependence on imrorts of manufactured goods is high ond inareasirg, despite heavy protection of Woontic producers by customs dutizs. Although a number of recently established industries (fertilizEr, petroleum, rubber) have re- lieved to some extent the dependence on inoorts, the share of domestic production in total domestic demand for manufactures dclined from 75% in 1954 to 67 in 1964. At the same time exponts of manufactured goods, although increasing, remained very low, representing 2' to 3% of total manufacturing output. 41. Apart from the general effects of increasing agricultural and urban incomes, the main expansionary factor in manufacturing output was the continued boom in construction activity, particularly bousing, favoring such branches as cement, glass, stone, metal and woodworking industries. Successful ventures producing for export markets have been limited to re- building and repairing of ships, aluminum and nickel as very recent addi- tions and a number of other industries selling comparatively small quantities - 10 - abroad like footwear and some textile products. Processing of domestic agricultural products and raw materials other than those mentioned above has made little progress so far. 42. Private investment expenditure in manufacturing has increased very rapidly in recent years at an average annual rate of about 35% since 1962. However, the amounts involved are still relatively small. Less than 3% of total gross national expenditure has been devoted to fixed capital formation in manufacturing and mining, and despite the rapid ex- pansion in recent years it accounted for only about 12% of total gross fixed investment in 1964, amounting to much less than half of investment expenditure for new dwellings. 43. Private foreign investment has played a prominent role in Greece's recent industrial development. More than one-third of total investment in manufacturing since 1960 came from abroad, of which about four-fifths went into non-ferrous metallurgy and chemical industries. However, these invest- ments have so far been limited to large capital intensive undertakings, with little impact to improve the generally poor competitive position of other industrial branches. 44. Manufacturing industry is predominantly family-owned, with less than 1 of the enterprises registered as corporate companies. State- ownership plays a minor role and consists mainly of a fertilizer plant and an oil refinery which is leased to private enterprise. 45. Manufacturing industry depends heavily on outside financing. The share of liabilities to total assets appears to have remained relatively stable around 67% in recent years. The ratio varies greatly between branches of industry and is not clearly related to profitability or the importance of fixed capital in the industry. An exception is the important and long-established tobacco industry, whqich depends with a very low share of fixed capital, to the extent of about 90% of its financing on loans. 46. The commercial banks are by far the largest source of finance, about two-thirds of their loans consisting of short- and medium-term finance and one-third long-term. Since 1960 total credits outstanding have increased by about 15% a year on the average and reached Drs. 20.8 billion at the end of 1965. The volume of long-term credits remained com- paratively low, despite the policy to provide long-term loans for industry at lower interest rates than short-term. 47. Financing of industry by the capital market has remained negli- gible. The Government has announced its firm intention to reorganize the capital market into an effective instrument of long-term industrial financ- ing. A deficient supply of attractive securities rather than the lack of sufficient demand is thought to be the prime immediate obstacle. Pro- posed measures include special tax exemptions on income from dividends where corporations issue part of their shares for public subscription and distribute their stock over a relatively large number of shareholders. Those exemptions will only be granted on securities listed on the Stock - 11 - Exchange and a Capital Market Committee has been suggested to guide and control the securities market. It is further proposed that new types of securities (preferred shares, convertible bonds) and the establishment of investment companies and mutual funds should be permitted. The Hellenic Industrial Development Bank and the two private industrial development banks sponsored with foreign participation by the National Bank of Greece and the Commercial Bank of Greece are expected to play a major role in the creation of new securities. 48. A variety of preferences, protection, exemptions and special laws are other measures designed to encourage industrial development. Apart from high customs tariffs often reaching 50% and more ad valorem, preferential interest rates are granted on long-term credits, particularly for investments by export industries. Imports for specific investment projects can be freed from import duties and general tax exemptions and depreciation allowances are generous. Special tax and other preferences are granted to industries establishing themselves outside the densely populated and congested areas of Athens - Piraeus and Salonika. A 1965 law provides for industrial estates in Volos, Cavalla, Heraklion and around Salonika to furnish industry with land, buildings, utilities and housing in specified zones. 49. Foreign investors are protected by various laws, extending to them the same rights as Greek nationals enjoy with additional guarantees against expropriation and providing for transfers abroad of profits and capital. Association with the Common Market provides preferential entry of Greek manufactured goods into the Community and at the same time pro- tection by tariffs against competition in Greece for many years to come. 50. However, a number of factors still impede a more rapid develop- ment of manufacturing industries. High production costs are often due to inefficient processes of production as well as to the low efficiency level of other sectors of the economy on which manufacturing depends for its inputs of material and services and for the distribution of its products. Insufficient public investment in infrastructure forces private firms to make undue investments in such facilities for their own use. In addition the deficiencies of the existing system of higher education prevent an adequate supply of well-trained administrators and technicians. Monopo- listic practices protect inefficient firms, not only by a heavily protected domestic market, but also by frequent Government interventions, rules and restrictions on the entry of new firms. A large number of impediments, none of which solely responsible, has so far prevented a faster and more economic development of manufacturing industries, for which prospects exist, although the available natural resources and the potential markets limit the lines of industrial production having clear competitive advantages. Tourism 51. Foreign visitors have made a substantial and growing contribution to national income, employment and the balance of payments in Greece. Foreign exchange earnings from tourism increased from $49.3 million in 1960 - 12 - to $107.6 million in 1965, an amount equivalent to 22% of the country's total receipts from the export of goods and services and 32J of merchandise exports. The number of tourists visiting Greece started to increase sub- stantially after the devaluation of 1953. In the decade 1954-63 annual growth averaged 17% accelerating to an average of 22% in the years 1959-63. After the slowdown in 1964 due to the Cyprus crisis, the growth rate picked up again to 26% in 1965. The share of European countries has been in- creasing steadily and reached 51% in 1963 and 67% in 1965, while the share of the American tourist remained roughly constant at 21% to 22%. In recent years about 38% of all visitors arrived by air, while the share of arrivals by road has been increasing steadily from 7% in 1958 to 15% in 1964 and 17% in 1965, reflecting the improved accessibility for an ever- increasing number of European motor cars. 52. Greece receives a comparatively large number of visitors with high incomes, resulting in a relatively even spread over the seasons and a long stay of its tourists, in a preference for luxury and first-class hotels, and hence in high per capita foreign exchange expenditure. Although high income bracket tourists have obvious advantages, it should not be overlooked -Yhat "mass tourism" is considered in most other countries not only the bi.ore of the industry, but also the basis for future high- income tor-,; acd abovet all the cheapest advertising medium for the natural beauties of a country, e.g. by thousands of postcards sent around the world. 53. Greece has traditionally been a tourist country for its out- standing monuments of seiert history. However, it would be unrealistic to assume that the spectacular growth of tourism in the recent past has been promoted primarily by scholarly interests. Greece has ideal climatic conditions with an extremely long coastline of its mainland and islands, not overcrowded beaches and an abundance of a variety of scenery of un- surpassed beauty. Considering the fcst increase of personal incomes in the industrialized countries of the West, the improved accessibility by air, sea and road, Greece so far has tapped a relatively small share of the rapidly expanding market for Mediterranean vacations. Tourist develop- ment in Greece will therefore largely depend on the Greek ability to respond to this demand. The disadvantage of longer distances from the main tourist sources compared to other Mediterranean countries is unlikely to be a serious impediment and is being reduced by better access roads and other means and the steadily growing use of motor cars in Western Europe. 54. It is estimated that in 1965 about 73,000 beds were available for tourists, of which 39,000 in hotels, 20,000 in boarding houses and the remainder on cruise ships, in summer resort accommodation and on camping sites. Lack of more of these facilities is probably the most important single impediment for faster growth of tourism. The Plan projects the addition of 84,000 beds in the period 1966-70, in hotels and other instal- lations, requiring a sharp increase in investment expenditure to about Drs. 1.3 billion a year, mostly by the private sector. The State is to contribute Drs. 450-500 million annually to the general development of tourism in providing special infrastructure, educational facilities, market - 13 - research and advertising and promotion. Special incentives are planned to be provided within the framework of a comprehensive tourist development policy to be worked out, similar to the measures applied in the industrial sector. 55. Compared with the assistance provided by the State to other sectors of the economy, help to tourism seems to be on a rather modest scale. Tourism is at present the fastest growing industry in Greece and has undoubtedly the best development potential in terms of comparative advantages. Foreign exchange returns to investment in tourism compare highly favorable with those to investments in other sectors and tourism creates probably more than double the employment than manufacturing industry per unit of investment. Transport 56. All indications point to the fact that the demand for transport services has been rapidly increasing in the past few years. During 1958-63 the latest period for which data are available, it is estimated that average yearly passenger movements increased by 11.7% on the roads and 6.8% and 6% by air and sea respectively. Rail passenger traffic remained roughly constant. Growth in transportation of goods for the same years was 6% for ships and 5r for rails. The number of motor vehicles in operation increased by 15% in 1962, 1% in 1963, and 15% in 1964. The respective figures for passenger cars are 16%, 19% and 210. 57. Government authority over transport is distributed among a relatively large number of ministries, without an effective mechanism for coordination. A national transportation study is currently being carried out with the purpose of collecting and analyzing the basic material in order to provide the possibility of coordinating and organizing a compre- hensive transport system. It is expected that the study will form the basis of a revised transport chapter in the Development Plan. 58. Road construction expenditure, by far the major part of public investment in transport facilities was expanded at a fast pace in recent years. While annual expenditure averaged Drs. 680 million in the years 1960-63, it amounted to Drs. 862 million in 1964 and Dr. 1,538 million in 1965. A major step forward has been made in the recent past in the pro- vision of a modern highway connection Salonika-Athens-Patras with the help of the European Investment Bank. A Bank project composed of various sections of high-priority roads within the program to improve and recon- struct existing roads is currently being prepared. 59. Law 3155 of 1955 still provides the basic framework within which road construction and improvement has been undertaken in the recent past. It defines three principal road categories: National, provincial and communal. The law approved the largely new construction of a total length of 8,150 km of national roads and 31,000 km of provincial roads. So far only 2,350 km of national and 2,000 km of provincial roads have been com- pleted, leaving Greece with one of the poorest networks in Europe per - 14 - square kilometer of area. Even assuming full completion of this program, Greece will only have 295 km of national and provincial roads per thousand square kilometers, compared to 413 km in Italy and 1,390 km in France and Germany at present. 60. In an attempt to reorganize and modernize the railways, a study sponsored by 0.E.C.D. is presently under consideration by the Greek authorities. The existing railway network is almost entirely single-track and not integrated into a uniform gauge system. The available equipment is not sufficient to meet the volume of present demand and about half of traction and rolling stock is more than 35 years old. Annual investment averaged slightly more than Drs. 200 million in the last 5 years. The deficit covered by the State budget was Drs. 550 million in 1965 and fluctu- ated around Drs. 450 million in earlier years. 61. In contrast to an efficient international shipping industry, domestic shipping has made very little progress. About half of the tonnage of coastal and Mediterranean cargo vessels is more than 25 years old and a multitude of antiquated ports with small traffic continues to be operated. Power 62. Electric power consumption increased at an average annual rate of 145 in the years 1950-65. In 1965 it totalled KIH 3800 million, 17% more than in 1964 and about 6 million people out of a population of 8,550,000 were supplied with electric power. Industry accounted for about half of total demand, a relationship which was fairly constant for the last five years. 63. Demand for power is expected to increase substantially in the years ahead. Industries with a high consumption of electric power have recently been brought into or will be in operation in the near future. Among them are factories for the production of aluminum, nickel, nitrogen, ammonia and petro-chemicals with a total estimated annual consumption of 1,700 million KIH. In addition, there is an important program of rural electrification. 64. Power generation has been stepped up considerably in the recent past and a number of new thermal and hydro-electric power stations have been or are about to be brought into operation. It is expected that the total installed capacity of the inter-connected national system of the Public Power Corporation will amount to 1,400 MW by the end of this year, compared with 790 MW in September 1965. Roughly half of it will be hydro- power plants and nearly one-third thermal plants using domestic lignite. Prior to 1953 almost all power produced was thermal based on imported fuel. 65. The PPC's ten-year expansion program 1965-74 expects power con- sumption to reach 12,750 million KWH at the end of the period. Firm plans for an installed capacity of 2,328 MW by 1970 and initial construction of a fur- ther 968 iAW to satisfy system demand for the period immediately following 1970 - 15 - are currently in the implementation stage. Investment expenditure is esti- mated to increase from Drs. 2,900 million in 1965 to Drs. 3,200 million in 1966 and Drs. 4,670 million in 1967 and around Drs. 5,300 million in the years 1968-70. About half of the amounts will be for generating plants and the remainder for transmission and distribution. The Public Power Corporation, a well-managed institution, has been successful in floating bond issues at home and securing loans from abroad in financing its expan- sion. Health and Social Welfare 66. Although the general health of the population is roughly in line with internationally acceptable standards, a large increase in the alloca- tion of government funds is desired in the next five years, mainly to provide better hospital facilities. Annual current and investment expend- iture for public health is shown in the Draft Plan to increase from Drs. 2,830 million to about double this amount. 67. For social welfare purposes the Plan proposes investments of Drs. 850 million for the period 1966-70, a much larger amount than was realized during the whole post-war period by the State and private initi- ative, and proposed current expenditures are nearly four times that of the last five years. Education 68. The available statistics suggest that during the period 1961-65, the education level of the population and of the labor force improved even faster than in the decade 1951-61. However, despite this notable progress, educational levels have remained low in comparison with Western European countries. The reform of 1964 extended compulsory education from six to nine years, and now much remains to be done to improve secondary, technical, vocational and higher education. Investment expenditure of Drs. 422 mil- lion in 1965 was more than four times the amount spent in 1960, and for the years 1966-70 the Plan suggests an amount of Drs. 9,800 million, almost six times that of the five years 1961-65. VI. GOVERNMENT POLICIES AND MOBILIZATION OF RESOURCES Money and Credit 69. The year 1965 marked the turn in a long-term acceleration of the increase in the money supply. Although still growing strongly, the rate of expansion declined to 140 compared to a peak of 19% in 1964 and 15% in each 1963 and 1962. The rapid increase was due primarily to the expansion of credit to finance the public sector, which in 1964 was almost double what it was in 1963 and continued to expand in 1965. Financing of the private sector expanded further, but less vigorously than in earlier years. The growth of private deposits slackened considerably after 1963. - 16 - 70. The development of private deposits with the banking system re- flects to a large extent the reaction to increased inflationary pressures throughout the economy. Total deposits achieved a record increase by 24,/ in 1963, but with mounting political uncertainties with the Cyprus crisis, the weak position of the Government and the danger of a deteriorating economic situation, the rate of growth of deposits declined sharply to 14% in 1964 and 12% in 1965. That this was basically a consequence of renewed hedging against inflation - to which Greece is still particularly sensitive - is evidenced by the movement in savings and time deposits. While they rose by Drs. 5,260 million in 1963 they grew by Drs. 3,050 million in 1964 and by Drs. 2,930 million in 1965. MONEY SUPPLY (billion Drachmas) 1962 1963 1964 1965 Total Money Supply 20.5 23.6 28.2 32.3 Annual Change +15% +15% +19% +14% Increase (+) or Decrease (-) resulting from: Central Government +1.9 +2.3 +6.8 +5.3 Loans and Advances to Private Sector +4.9 +6.0 +5.7 +4.2 Private Deposits with Banking System -4.7 -5.6 -3.9 -3.3 Balance of External Payments +0.5 +0.4 -2.9 -1.5 71. These developments were primarily connected with increased hoard- ings of gold sovereigns, an uninterrupted boom in the construction of housing and an accelerated increase in private consumption. Although the abolition of the free market for gold sovereigns has probably contributed to increased consumption, it has eliminated a long-standing element in the monetary system which was a major impediment for the resumption of sub- stantial growth of deposits. On December 23, 1965, the Bank of Greece's policy with regard to the sovereign was changed radically. In contrast to the previously free market, sovereigns are now sold to the public at the condition that they can only be resold to the Bank of Greece, which under- takes to buy at progressively decreasing prices. The effect of those measures was striking and immediate. Not only did the Bank of Greece no more need foreign exchange to buy sovereigns abroad, but the return flow of sovereigns into the Bank of Greece brought about a rapid increase in the reserve of these coins. - 17 - 72. The growth of total credits of the banking system to the economy, excluding Central Government, showed a markedly declining rate in recent years. The increase of Drs. 6,600 million in 1965 amounted to 12%, compared with 16% in 1964 and 20% in 1963. The renewed slow-down in 1965 was due to the reduced expansion of credit to the private sector, whereas the financ- ing of public enterprises and entities expanded at about the same rate. Bank credits to the State for the purchase of price-guaranteed agricultural products, primarily due to the stockpiling of wheat and tobacco, rose by 28% in 1964 and 34% in 1965 to reach Drs. 2,420 million. In addition, the difficult budgetary situation was relieved by the expansion of the treasury bill issue by Drs. 1,000 million. The Government also borrowed about Drs. 1,000 million from the Bank of Greece on special accounts to prefinance its investment budget, in anticipation of foreign loans, NATO contributions and a domestic bond issue. 73. The smaller increase in outstanding credit to the private sector affected mainly long-term loans to industry. This was only partly due to a slackening of demand for bank credits for large projects in 1965. The slower growth of deposits which followed the rapid expansion of long-term credits in 1964 brought about a contraction of the amount of capital available to the commercial banks for this purpose. 74. The Capital market is still playing a minor role in investment financing, and what is more, along with the increasing uncertainties in recent years, its importance has declined steadily. Whereas in 1962 an amount of Drs. 2,192 million new securities were issued, the figure was only Drs. 1,070 million in 1965. In this year the Public Power Corporation was able to float bonds for Drs. 800 million, while the remainder of Drs. 270 million of the total amount raised consisted of shares, none of which were issued to public subscription. 75. The monetary authorities have taken new steps to improve the adaptation of monetary flows to the needs of the economy, initially to check the inflationary increase in the money supply. In 1965 an annual "monetary and credit plan" was introduced to adjust the programs of govern- ment departments, public agencies and enterprises as well as of the credit institutions to available resources. Although by the nature of this mechanism, emphasis is given to the restriction of expenditure and credit, it proved possible to avoid to some extent at least the concentration on short-term factors of the previous monthly programs formulated by the Currency Committee. Public Finance and Taxation 76. The long-term budgetary situation of the Central Government may well impede rapid and orderly economic development. Surpluses of the ordinary budget available to finance Government investment expenditure have been declining steadily in the last years. It reached a peak of Drs. 2,100 million in 1962, Drs. 800 million in 1964, and in contrast to the originally planned surplus of Drs. 1,000 million for 1965, a decline to a mere Drs. 100 million resulted. It remains to be seen whether the promising - 18 - developments in the first half of 1966 will lead to a return to the earlier trend of increasing surpluses in the current budget. CENTRAL GOVERNMENT BUDGET (billion Drachmas) 1962 1963 1964 1965 19661/ Current Expenditure 18.0 20.0 24.0 28.1 30.3 Investment Expenditure 5.9 5.1 5.4 5.4 6.5 Total 23.9 25.1 29.4 33.5 36.8 Receipts 20.2 22.4 26.1 29.4 33.5 of which current surplus 2.1 1.7 0.8 0.1 2.2 Deficit before aid and borrowing 3.7 2.7 3.3 4.1 3.3 financed by: foreign sources 1.6 0.1 1.5 1.5 1.2 internal borrowing 2.1 2.6 1.8 2.6 2.1 1/ Forecast. 77. Much larger payments of subsidies to agriculture and higher salaries for State employees were the major elements in the substantial increase of expenditure in the ordinary budget, which rose by 205 in 1964 and 17% in 1965 to Drs. 28,660 million. In 1962 and 1963 the rise was 9% and 11 respectively. Current receipts have not kept pace with this devel- opment. The rise of 13% in 1964 and 14% in 1965 was clearly insufficient to avoid a widening gap, although the increase has slightly accelerated from the annual rate of about 9% in 1962 and 1963. 78. In addition, contingent budgetary expenditure for stockpiled agricultural products is large. The outstanding debit balances of the Consumer Goods Account and other extra-budgetary accounts, which register these transactions, had increased to more than Drs. 10 billion at the end of 1965. Losses from future sales of agricultural surpluses presently held by the Government may amount to Drs. 2.4 billion to Drs. 2.5 billion. 79. Apart from increasing expenditure for current purposes, the declining budgetary surpluses were due to a large part to the poor perform- ance of tax revenues in relation to the booming state of the economy. Revenues from direct taxation of individuals and corporations, contributing traditionally a relatively small part of State revenues, increased slowly in recent years, and declined in 1965 due to a cut in tax rates and the addition of exemptions as part of the Government's policy to promote industrial development. - 19 - 80. The bulk of the increase of tax receipts has come from indirect taxes, which account for more than two-thirds of total revenues. Receipts from customs duties increased considerably by 200 in 1965 and 165 in 1964. Apart from special factors like abolition of certain tax exemptions, higher taxes on gasoline and acceleration of customs clearance operations towards the end of 1965 in anticipation of higher tax rates, the rise was largely due to the rapid general increase of imports. Increases by 17% in 1965 and 13% in 1964 of other indirect tax receints resulted mainly from the expansion of economic activity. 81. Budgetary prospects in the longer term call for a major tax effort in several respects. The low rate of direct taxation of income and wealth which has been declining in a period of rapid economic growth can hardly be justified. In relying on indirect taxation, particularly levies collected at the border, State revenues tend to follow the pattern of imports and consumption. However, with policies designed to restrict the growth of consumption and therefore limiting imports of consumer goods, yields from indirect taxes are likely to grow less in the future. 82. Viewed against this background, the increase of public spending expected in the Draft Plan appears to be out of line. Prospects of in- creased social expenditures, higher remuneration of civil servants and sub- sidies to agriculture along with the policy to keep farmers income in line with the growth of other incomes would make it unlikely that the growth of current expenditures will be checked effectively, all the more since large amounts of agricultural products already stockpiled are burdening the budgets of future years. On the other hand, large current surpluses are required to expand public investment, for which the Plan provides almost a doubling of Central Government expenditure for the period 1966-70. Public Investment and Its Financing 83. The worsening budgetary situation of recent years had the effect of reversing the trend of increasing Government investment in infra- structure in the late fifties and early sixties. Central Government in- vestment increased from Drs. 2.2 billion in 1957 to Drs. 5.9 billion in 1962, but declined thereafter to Drs. 5.4 billion in 1965. Central Govern- ment investment expenditures not only had to be cut down, but traditional sources of finance had to be supplemented by Central Bank credit. 84. Thus, in 1965, the Bank of Greece advanced some Drs. 1.0 billion in anticipation of further foreign loans under negotiation and the contri- bution of NATO. In addition, some Drs. 1.0 billion of treasury bills were sold to the commercial banks holding them instead of long-term credits. The remainder was made up by funds from American aid and foreign loans, which kept fairly stable at an annual level of about Drs. 1.5 billion, the regular contribution from revenues of previous State investment (Drs. 1.0 billion), the transfer of the unused portion of the 1964 budget (Drs. 0.3 billion) and funds not otherwise specified, advanced by the Bank of Greece. - 20 - 85. Although shortcomings in the preparation and implementation of projects have occasionally been a factor in limiting investment expenditure, the major impediment to realize planned investments of the 1966 budget and beyond is likely to be the shortage of funds. The decline in American aid has yet to be compensated by rising official loans from elsewhere and domestic savings. Present plans to finance the State Investment Budget 1966 include Drs. 5.3 billion from domestic sources, of which Drs. 2.1 billion is expected from internal borrowing in the form of treasury bills and a bond issue, in addition to Drs. 2.2 billion contributed by the current budget and Drs. 1.0 billion by investment revenue. Foreign sources are expected to cover the balance of Drs. 1.2 billion. 86. In order to cope with the budgetary difficulties a number of tax changes were introduced in the current year and others proposed to Parlia- ment. Receipts from indirect taxes are expected to increase by Drs. 1.4 billion in 1966, mainly from a 20% increase of turnover taxes, new and higher stamp duties and heavier taxation of motor cars. An additional 10% of income tax levied on individuals and public entities was expected to yield Drs. 300 million, but parliamentary approval was not forthcoming. Total ordinary revenues in the 1966 budget are estimated at Drs. 32.3 billion, equivalent to an increase of 15% over 1965. Since current expend- iture was planned to increase by 8% to Drs. 30.3 billion, a current surplus of Drs. 2.0 billion was expected. 87. If it is possible to realize a current budget surplus of the order of Drs. 2 billion - which, however, is not yet certain without in- creasing income taxes - the start for a resumption of growing Central Gov- ernment investments would be made. The investment budget for 1966 totals Drs. 7.6 billion, against which a ceiling of total payments of Drs. 6.5 billion has been given. Compared with actual expenditure of Drs. 5.3 billion in 1965, this would imply an increase by more than 20%. 88. The proposed investment budget consists basically of a continu- ation of projects already started in earlier years. No basic changes in its composition are attempted. Irrigation and other land improvement works and highway construction are expected to absorb almost half of total ex- penditure, a somewhat smaller share than in the preceding years. The Government has declared as its deliberate policy not to start major new projects for the time being, in view of the fact that the State Investment Budget faces committed expenditure totalling five to six times recent annual disbursements. 89. In addition to investments undertaken by the State, investment expenditures by various public enterprises and agencies like the Public Power Corporation, the Greek Telecommunications Organization, the Workers Housing Organization and long-term lending by the Agricultural Bank and the Hellenic Industrial Development Bank, totalled about Drs. 6,650 million in 1965, an increase of about 21% over 1964. 90. Purposes of Central Government investments have often been deter- mined by political considerations, with the result that too many projects of rather limited significance are under way, while some others are badly - 21 - organized. The choice of projects on the basis of cost-benefit comparisons has been lacking and the originally proposed costs may bear little relation to present conditions. These deficiencies are now recognized and the Government has set up a committee to review commitments for the State In- vestment Budget. 91. The slow growth pace of public investment in recent years is revealing itself more and more as a depressing factor in the Greek effort of economic development. A serious lag has occurred in providing public infrastructure works which are prerequisites for the rational development of the private sector, and a much greater effort to increase Government savings is long overdue. In addition to improving and expanding the economic infrastructure it is indispensable for the Government to create an economic and social system based much more on competition in order to reshape and modernize the Greek economy. The prevailing system is unlikely to be able to cope effectively with the current issues. Balance of Payments 92. The deficit in the balance of goods and services has increased considerably in the past two years and reached :'412 million in 1965, com- pared with $335 million in 1964 and an annual average of $230 million in 1961-63. The outstanding factor was a further substantial expansion of imports which was not net by a sufficiently large growth of foreign exchange earnings. Imports grew by 17% in 1965 while exports increased by 7%, leaving a trade deficit of $700 million, $126 million more than in 1964. Although invisible earnings grew rapidly and the inflow of capital regis- tered another substantial increase, they were not sufficient to prevent a decline of foreign exchange reserves. BALANCE OF PAYMENTS (million of U.S. Dollars) 1961 1962 1963 1964 1965 Imports -585 -690 -748 -882 -1031 Exports of Goods 235 243 296 308 331 Net Receipts from Transportation and Tourism 134 148 177 184 212 Balance on Goods and Services -199 -273 -222 -335 -412 Remittances from Emigrants and Workers Abroad 98 117 129 117 129 Private Canital Inflow 47 71 83 106 160 Public Capital Inflow 73 31 38 79 36 Year-End Foreign Exchange Reserves 251 270 278 266 235 - 22 - 93. Foreign exchange earnings from exports of goods have been over- shadowed by the unfavorable long-term prospects in world markets for Greece's main export products. Tobacco, still the most important item, was sold in smaller amounts in the recent past, and its share of total ex- ports of goods declined from 43% in 1963 to 38% in 1964 and 34% in 1965. Although a switch to other varieties is expected to bring some relief, prospects are that exports will stagnate at best in coming years. Simi- larly, exports of currants and sultanas are not expected to continue the rising tendency which has lifted their contribution from 11Z in 1963 to 13% in 1965. Cotton exports, one of the big hopes in the early sixties despite adverse world market conditions, have declined substantially, leaving them with a share in total exports of 6% in 1965 compared with 12% in 1963. 94. A number of expanding and promising branches have achieved quite substantial export growth rates. However, their combined share is still too small to offer the prospect of raising the rather sluggish performance of total exports to a level more commensurate with present and prospective import needs. Fresh fruits, mainly citrus, have increased their contri- bution from 6% in 1963 to 8% in 1965, and the share of minerals, at present 8%, is expected to increase substantially with aluminum and nickel plants coming into operation. Furthermore, exports of a variety of manufactured goods have increased rapidly, bringing their share from 3% in 1963 to 8% in 1965, with the additional advantage, that 90% of these exports went to countries with convertible currencies. 95. The rapid increase of imports was fairly general with only minor changes in the broad pattern of their composition. Above average increases were registered for investment goods and foodstuffs, raising their respec- tive shares of total imports to 23% and 20% in 1965; especially imports of meat and dairy products rose rapidly. The expansion of manufactured con- sumer goods and fuel imports was checked to some extent by heavier taxes collected at the border. Although some import savings will be forthcoming, particularly from the Esso-Pappas concern in Salonika producing fuels, petro-chemicals, steel and others, import needs are likely to grow further at a rapid rate in the near future if the Greek economy is to expand at a similar pace as in recent years. 96. Changes in the geographical distribution of Greece's foreign trade have been relatively small. Exports to the EEC increased more rapidly than total exports, while the relative importance of imports declined. The trade deficit with the Common Market therefore declined from 50% of the overall gap in 1963 to 40% in 1965. Exports to the EEC are likely to in- crease further, particularly industrial exports which are accorded prefer- ential treatment under the treaty of association similar to those enjoyed by the full members of the Community. Prospects for exports of agricultural products to the Common arket countries will depend largely on the arrange- ments still under negotiation governing the harmonization of agricultural policies with those in the EEC. Bilateral trade agreements, mainly with the eastern bloc countries, have been increasingly used as an outlet to dispose of products not favored by world markets (tobacco and sultanas) or of products with quality standards below those generally required in Western Europe. - 23 - 97. Invisible receipts have further increased their contribution in covering the import bill, with the surplus rising by 187 in 1965 to more than $400 million, including remittances from emigrants and workers abroad. Receipts from international shipping, with 30% of total invisible receipts, have been growing more slowly than receipts from tourism with a share of 20%. Workers remittances of wages and salaries increased by a spectacular 28%. Invisibles generally have without doubt better prospects of further substantial increases than exports of goods. Workers remittances in the immediate future and tourism in the longer term are likely to be the most dynamic elements. 98. Net private capital inflow from abroad in 1965 is estimated at $160 million, compared with $106 million in 1964 and $105 million in 1963. The rapid increase in last year's inflow of private venture capital is largely attributable to funds imported by the large industrial complexes of Esso-Pappas, Aluminium of Greece and Hellenic Shipyards. Furthermore, real estate purchases by foreigners have again increased. Official capital imports totalled $36 million in 1965 compared with $79 million in 1964. In addition, supplier's credit increased by $32 million in 1964 and $38 mil- lion to $240 million in 1965. 99. Another part of the increasing import bill had to be paid by foreign exchange reserves. Official holdings of foreign exchange, which do not include the reserve of gold sovereigns held by the Bank of Greece, declined by $31 million to $235 million at the end of 1965. A moderate increase has taken place in the first half of 1966, mainly as a result of drawings from a line of credit of $30 million by EMA and in part attrib- utable to the new conditions on the market for sovereigns. Present foreign exchange reserves cover about 3 months' imports. 100. Prospects are that pressures on Greek foreign exchange reserves will continue in the immediate future. Exports of goods and services as well as the inflow of capital and unilateral transfers have developed quite favorably in relation to reasonable expectations, and given careful poli- cies to preserve monetary stability and balance of payments equilibrium, growth of foreign exchange receipts in a similar order of magnitudes as in recent years is likely to continue. Longer-term balance of payments pros- pects will therefore depend largely on the extent to which imports will grow and hence on the respective implications of the direction and scope of general economic policies. VII. PROBLEMS AND PROSPECTS 101. Given political stability, economic expansion is likely to depend much more than in the past on progress made in restructuring the economy towards more productive activities. Increases in output from the gradual absorption of the unemployed are likely to be much smaller than in the past. Furthermore, the total labor force could even decline if emigration of temporary workers to Germany and other industrialized European countries is to continue at a substantial rate over a period of years. - 24 - 102. Although this may be regretted for various reasons, continuing emigration is perhaps the major element in the process of further large productivity gains in the economy, ensuring a comparatively rapid improve- ment in the standard of living of the remaining population, along with a more equitable distribution of incomes. Greek workers abroad also tend to return after a certain period of time, thereby providing the basis of a well-trained labor force at home, familiar with conditions in modern Euronean industries. 103. Experience has shown that emigration originates mainly from rural areas. This decline in the farm population should make it easier to introduce the major changes, especially in the size of farms, discussed in the report on agriculture, that are required to improve the long-term prospects for agriculture. 104. Although there is little prospect that manufacturing industries will decisively increase their labor force, an increasing contribution to national income by manufacturing can be expected, mainly from large under- takings recently established. Smaller supporting industries may expand more rapidly, and other foreign industrial enterprises may be established following the example of Pechiney, Esso-Pappas, and others. But it is difficult to see a sufficient number of new large industries to promise a further decisive leap forward in production in the near future. 105. Tourism has good prospects. Particularly in view of its high labor intensity, the relatively rapid turnover of capital invested and its large and rapid creation of foreign exchange, promotion of tourism deserves high priority. 106. Apart from a general overhaul of agricultural policies and a reorientation of public investment in this sector, there are similar defi- ciencies which apply to other fields of Government activity as well. Failure to establish in advance the economic feasibility of public sector projects is common and an appropriate and effective mechanism to determine priorities among those projects found economically feasible, has yet to be created. Furthermore, much more emphasis needs to be placed on completing projects within a given time by limiting commitments to resources likely to be available. Although the Development Plan does not give a blueprint for the removal of all these difficulties, it indicates many directions in which possible solutions can usefully be sought. 107. If the State is to fulfill its role as promoter of economic development, both the preparation and execution of infrastructure projects and the mobilization of resources to finance Government investments need to be improved. The situation in Greece of an economy booming by any standard, but with Central Government investment expenditures in public infrastructure works actually declining over a number of years may indeed be unique. The stage could be reached where the lack of some public services would seriously impede further development. - 25 - 108. The capital market is likely to be an expanding source of funds for Government investment in the future. Monetary stability has been maintained surprisingly well despite a prolonged Government crisis, and recent measures suggest that maintenance of monetary and balance of pay- ments stability is still a firmly established principle. The Government hopes to raise Drs. 900 million from a bond issue in the domestic market before the end of this year. 109. Even on most favorable assumptions of the Government's ability to mobilize domestic resources, a large gap will remain if it is attempted to implement public sector investments as proposed in the Plan. It is unlikely that foreign resources will be forthcoming in sufficient amounts to make up the difference, particularly in view of the termination of American aid. Finance provided through the 0.E.C.D. Consortium is unlikely to bridge the gap. 110, Solutions to many of the problems mentioned above are closely connected with the position of the balance of payments. Possibilities of expanding merchandise exports are moderate in the longer run and much more limited in the short-term. Prospects for the expansion of foreign exchange earnings from tourism are excellent, but comparatively small in relation to the rate at which imports have been rising. Receipts from international shipping and from emigrants' and workers' remittances should continue to grow substantially. However, if imports expand at similar rates as in the recent past, the gap between current receipts and payments would widen considerably. Ill. Looking at the experience of 1965, it is unlikely to be easy to maintain an annual net capital inflow of about $200 million and a signifi- cant further depletion of foreign exchange reserves is hardly conceivable without adverse repercussions on the inflow of private capital and on emigrants' and workers' remittances and earnings from international shipping. It therefore seems unavoidable that in the near future the major factor in keeping the balance of payments in equilibrium will have to be a more moderate growth of imports. 112. Total foreign exchange liabilities at the end of 1965 were esti- mated at about $900 million, of which about $420 million were public. Of the latter amount $186 million are post-war debts. In addition, outstanding suppliers' credit increased to $38 million to $240 million. Taking into account payments to service the small amount of prewar debt not yet settled, which is not included in the above total, foreign exchange needed to serv- ice present public debt obligations will total about $38 million in 1966 and gradually decline thereafter. Estimated service payments in 1966 are eauivalent to about 7% of exports of goods and receipts from tourism and international shipping in 1965. 113. Debt service obligations on existing external debt provide scope for assuming substantial additional foreign debt on conventional terms, but it is important that resort to external borrowing should be accompanied by - 26 - action to remove impediments to faster productivity gains and measures to promote rational economic development. Policies in recent years have been directed towards redistribution of incomes in order to improve the low standard of living of the mass of the people. With political uncertainties these measures have added to a deterioration in the fiscal and balance of payments situation which the authorities have taken steps to correct. STATISTICAL APPENDIX Table External Debt 1 Mid-year Estimates of population - Birth and Death Rates 2 Population: Economically Active, by Divisions of Economic Activity and Level of General Education 3 Emigration and its Effect on Labor Supply 4 Analysis of Gross Expenditure of the Economy 5 Percentage Distribution of Gross National Expenditure 6 Gross National Expenditure 7 Gross Domestic Product and National Income 8 Percentage Structure of Gross Fixed Capital Formation 9 Consumer Price Index 10 General Index of Wholesale Prices 11 Crop Output 12 Exports of Main Agricultural Products 13 Changes in Export Outlets for Main Crops 14 Changes in Agricultural Imports and Exports 15 Value of Agricultural Machinery 16 Land Consolidation 17 Loans by the Agricultural Bank of Greece 18 Suiiary of Cost of Direct Agricultural Support 19 Credit to Agriculture and Fishing 20 Structure of Manufacturing Industry 21 Transport 22 Consolidated Balance Sheet of the Monetary System 23 Factors Affecting Money Supply 24 Deposits with the Bank of Greece 25 - 2 - Deposits with Commercial Banks and Special Credit Institutions 26 Total Credit by Source 27 Total Credit by Sectors and Branches 28 Interest Rates on Bank Credits 29 New Issues of Securities 30 Central Government Budget (Consolidated) 31 Central Government Current Expenditure 32 Central Government Current Expenditures by Ministries 33 Central Government Current Revenue 3h Central Government Investment Expenditures by Branches of Economy Activity 35 Public Investment Expenditures 36 Financing of Central Government Investments 37 Balance of Payments 38 Exports by Main Categories and by Geographical Areas 39 Regional Distribution of Exports by Countries and Commodity Groups 40 Imports by Groups of Products and by Geographical Areas 41 Distribution of Imports by Countries and Commodity Groups 42 Table 1 GREECE - EXTERNAL MEDIUM- AND LONG-TERM /1 PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 1965 Debt Repayable in Foreign Currency (In thousands of U.S. dollar equivalents) Page 1 Debt outstanding December 31, 1965 Item Net of Including undisbursed undisbursed TOTAL EXTERNAL PUBLIC DEBT /1 419,400 /2 84,91h /2 Pre-Worl dWar II debt 233,165 233,16 Settle debt 215,898 215,898 Publicly-issued bonds /3 lA 202,7h2 202,7h2 Dollar bonds 37,712 37,712 Sterling bonds 165,030 165,030 h% Refugee loan of 1929 (Tranche of U.S.A.) 13,156 13,156 Debt not yet settled 17,267 17,267 Dollar bonds 7,132 7,132 French franc bonds 277 277 Gold franc bonds /5 /5 Sterling bonds 1,OL4 h,Oh Canadian dollar bond 5,81h 5,814 Post-World War II debt 186,235 251,749 Privately-placed debt 59,815 59,815 Suppliers' credits 11,581 11,581 Other b8,23h h8,23b Loans from Council of Europe 4,964 4,964 Loans from European Investment Bank 7,917 16,300 Loans from Eurofima 2,867 2,867 Loans from U.S. Government 52,818 105,290 Export-Import Bank 13,660 23,660 AID 14,759 39,383 Surplus Property 8,858 8,858 Ilaritime Commission 31 31 Dept. of Agriculture 15,510 33,358 Loans from other western governments 57,854 62,513 France 3,6h6 8,305 Germany 5h,047 5h,07 Yugoslavia 161 161 See footnotes at end of table. Table 1 GREECE - EXTERNAL MEDIUM- AND LONG-TERM /1 PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DECERBER 31, 1965 (CONT.) Debt Repayable in Foreign Currency- (In thousands of U.S. dollar equivalents) Page 2 /1 Debt with an original or extended maturity of one year or more. 72 Does not include Greece's share in the Ottoman debt. 7Y Does not include outstanding Pre-World War II Gold franc bonds. See footnote 5. / The dollar and sterling Offers of Settlement provide for payments to be made only during the years 1963-1967 but can be made permanent at the option of the Greek Government. /5 The following gold franc amounts were outstanding December 31, 1965: GF 60,000,000 Salonika-Monastir Railway 3%, due 1983 OF 11,922,000 GF170,000,000 guaranteed Gold Loan of 1898, 2W%, due 1963 GF 60,920,000 oF 60,000,000 Greek Loan of the Three Protector Powers, 5%, due 1871 GF 35,678,011. Statistics Division IBRD-Economics Department October 4, 1966 Table la GREECE - ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON EXTERNAL MEDIUM- AND LONG-TERN PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 1965 /1 Debt Repayable in Foreign Currency (In thousands of U.S. Dollar equivalents) Page 1 DEBT OUTST GRAND TOTAL (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMORTI- YEAR UNDISBURSED ZATION INTEREST TOTAL 1966 454,036 16,976 18,122 35,098 1967 434,738 19,883 14,069 33,952 1968 412,640 17,507 13,6b4 31,151 1969 392,973 19,561 13,386 32,927 1970 371,246 20,016 12,674 32,690 1971 348,928 20,389 11,713 32,102 1972 326,200 20,009 10,7h4 30,753 1973 303,852 19,759 9,895 29,654 1974 281,691 19,338 8,872 28,210 1975 259,896 15,524 8,016 23,540 1976 241,856 13,659 7,356 20,815 1977 225,826 12,117 6,798 18,915 1978 211,092 11,663 6,278 17,221 1979 196,787 11,581 5,780 17,361 1980 182,477 9,334 6,958 16,292 PRE-WORLD WAR II DEBTS /2 (SETTLED DEBT) DEBT OUTST (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMORTI- YEAR UNDISBURSED ZATION INTEREST TOTAL 1966 202,71 1,011 10,113 11,12b 1967 199,h08 1,011 5,25 6,256 1968 196,182 1,032 5,164 6,196 1969 192,990 1,099 5,084 6,183 1970 189,706 1,187 5,156 6,375 1971 186,215 1,278 5,096 6,374 1972 182,600 1,323 5,000 6,323 1973 178,936 1,20 b,906 6,326 1976 175,116 1,518 4,807 6,325 1975 171,139 1,625 4,701 6,326 1976 166,998 1,732 h,59 6,326 1977 162,696 1,865 h,h80 6,325 1978 158,235 1,961 4,364 6,325 1979 153,612 2,085 4,23 6,328 1980 148,797 2,213 4,113 6,326 Table la . GREECE - ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON EXTERNAL MEDIUM- AND LONG-TERM PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 1965 /1 (CoNT.) Debt Repayable in Foreign Currency (In thousands of U.S. Dollar equivalents) Page 2 DEBT OUTST DOLLAR BODS (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMDRTI- YEAR UNDISBURSED ZATION INTEREST TOTAL 1966 37,712 22h 985 1,209 1967 37,014 224 1,025 1,249 1968 36,336 192 1,009 1,201 1969 35,781 203 993 1,196 1970 35,236 218 1,030 1,248 1971 34,612 236 1,014 1,250 1972 33,984 239 996 1,235 1973 33,361 258 978 1,236 1974 32,708 275 960 1,235 1975 32,027 295 941 1,236 1976 31,316 315 920 1,235 1977 30,575 336 899 1,235 1978 29,807 357 878 1,235 1979 29,012 380 855 1,235 1980 28,170 404 831 1,235 STERLING BONDS DEBT OUTST (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMORTI- YEAR UNDISBURSED ZATION INTEREST TOTAL 1966 165,029 787 9,128 9,915 1967 162.,39h 787 L,220 5,007 1968 159,8b6 80 4,155 4,995 1969 157,209 896 4,091 4,937 1970 154,470 969 b,158 5,127 1971 151,603 1,042 4,082 5,124 1972 148,616 1,08L h,004 5,088 1973 145,575 1,162 3,928 5,090 1974 142,408 1,243 3,847 5,090 1975 139,112 1,330 3,760 5,090 1976 135,682 1,417 3,674 5,091 1977 132,121 1,509 3,581 5,090 1978 128,428 1,604 3,486 5,090 1979 124,600 1,705 3,388 5,093 1980 120,627 1,809 3,282 5,091 Table la GREECE - ESTINTED CONTRACTUAL SERVICE PAYMENTS ON EXTERNAL MEDIUI- AND LONG-TEM PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 1965 /1 (cONT.) Debt Repayable in Foreign Currency (In thousands of U.S. dollar equivalents) Page 3 POST - WORLD WAR II DEBTS DEBT OUTST (BEGIN OF PERIOD) PAYNENTS DURING PERIOD INCLUDING A1,1ORTI- YEAR UNDISBURSED ZATIO INTEREST TOTAL 1966 251,295 15,965 8,009 23,971 1967 235,330 18,872 ,824 27,696 1968 216,058 16,075 8,'30 24,955 1969 1?9,983 18,442 8,302 26,74 1970 131,540 18,829 7,406 26,315 1971 162,713 19,111 6,617 25,728 1972 143,600 18,686 5,74b 24,430 1973 124,916 18,339 L,989 23,323 1974 106,575 17,820 4,065 21,885 1975 88,757 13,899 3,315 17,215 1976 74,858 11,727 2,762 1L,h89 1977 63,130 10,272 2,318 12,590 1978 52,857 9,682 1,910 11,596 1979 43,175 9,b96 1,537 11,033 1980 33,680 7,121 2,815 9,966 PRIVATELY-PLACED DEBTS-TOTAL DEBT OUTST (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMORTI- YEAR UNDISBURSED ZATION INTEREST TOTAL 1966 59,393 8,509 2,976 11,85 1967 50,88h 9,791 2,722 12,513 1968 1,093 7,010 2,258 9,269 1969 34,083 5,h2 1,899 7,31 1970 28,61 5,525 1,581 7,106 1971 23,116 5,613 1,259 6,871 1972 17,503 5,206 931 6,137 1973 12,297 h,805 640 Q,N5 197' 7,92 h,910 358 5,268 1975 2,582 1,207 125 1,332 1976 1,375 830 60 890 1977 5 545 22 568 Table la GREECE - ESTINATED CONTRACTUAL SERVICE PAYMENTS ON EXTERWAL YEDIUM- AND LONG-TERM PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 1965 /1 (CONT.) Debt Repayable in Foreign Currency (In thousands of U.S. dollar equivalents) Page 11 SUPPLIERS CREDIT DEBT OUTST (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMORTI- YEAR UNDISBURSED ZATION INTEREST TOTAL 1966 11,158 6,338 372 6,710 1967 6,820 3,316 172 3,688 1968 1,504 851 69 920 1969 653 93 35 128 1970 560 93 30 123 1971 h66 93 26 118 1972 373 93 19 113 1973 280 93 1A 107 1976 187 93 9 102 1975 93 93 4 97 PRIVATELY-PLACED DEBT-OTHER DEBT OUTST (BEGIN OF PERIOD) PAYIENTS DURING PERIOD INCLUDING A;.OURTI- YEAR UNDISBURSED ZATION INTEREST TOTAL 1966 h8,235 2,171 2,606 6,775 1967 '6,066 6,675 2,550 9,026 1968 39,589 6,159 2,190 8,369 1969 33,630 5,369 1,866 7,213 1970 28,081 5,632 1,552 6,983 1971 22,69 5,520 1,236 6,75b 1972 17,130 5,113 911 6,026 1973 12,017 h,712 626 5,338 1976 7,305 6,817 369 5,165 1975 2,689 1,11h 122 1,235 1976 1,375 830 60 890 1977 545 565 22 568 Table la GREECE - ESTDHATED CONTRACTUAL SERVICE PAYMENTS ON EXTERNAL MEDIUM- AND LONG-TERM PUBLIC DEBT OUTSTANDING INCLUDING UNDISBEURSED AS OF DECEMBER 31, 1965 /1 (CONT.) Debt Repayable in Foreign Currency (In thousands of U.S. dollar equivalents) Page 5 COUNCIL OF EUROPE DEBT OUTST DEBT O PERPAYMENTS DURING PERIOD (BEGIN OF PERIOD) INCLUDING AMORTI- YEAR UNDISEURSED ZATION INTEREST TOTAL 1966 4,964 186 296 [82 1967 4,778 243 283 527 1968 4,535 259 268 527 1969 4,276 312 252 564 1970 3,964 396 232 628 1971 3,568 447 206 654 1972 3,120 475 179 654 1973 2,646 504 150 654 1974 2,142 535 119 654 1975 1,607 46 87 533 1976 1,161 360 61 421 1977 801 307 [2 349 1978 494 295 23 319 1979 199 153 8 162 1980 [5 45 1 [7 EIB LOANS DEBT OUTST (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMORTI- YEAR UNDISBURSED ZATION INTEREST TOTAL 1966 16,300 - 105 405 1967 16,300 268 579 847 1968 16,032 276 706 982 1969 15,756 908 789 1,697 1970 14,848 916 742 1,658 1971 13,932 925 694 1,619 1972 13,007 934 646 1,580 1973 12,073 942 598 1,541 1974 11,131 952 550 1,502 1975 10,179 961 502 1,463 1976 9,218 971 [53 1,424 1977 8,247 981 404 1,385 1978 ,7,266 991 355 1,346 1979 6,275 1,002 305 1,307 1980 5,273 1,013 255 1,268 Table la GREECE - ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON EXTERIAL MEDIUM- AND LONG-TERM PUBLIC DEBT OUTSTANDING INCLUDING UNDISPURSED AS OF DECE1BER 31, 1965 /1 (CONT.) Debt Repayable in Foreign Currency (In thousands of U.S. dollar equivalents) Page 6 EUROFIMA LOANS DEBT OUTST (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMORTI- YEAR UNDISBURSED ZATION INTEREST TOTAL 1966 2,867 111 139 250 1967 2,756 192 161 353 1968 2,563 195 150 365 1969 2,369 197 139 335 1970 2,172 199 128 327 1971 1,973 201 116 317 1972 1,772 205 105 309 1973 1,567 207 9 300 197h 1,360 210 82 292 1975 1,151 213 70 283 1976 938 216 58 27h 1977 722 184 45 229 1978 537 140 34 175 1979 397 16 26 171 1980 252 l88 18 167 U.S. GOVT. LOANS - TOTAL DEBT OUTST (BEGIN OF PERIOD) PAYIENTS DURING PERIOD INCLUDING AMORTI- YEAR UNDISBURSED ZATICN INTEREST TOTAL 1966 105,259 2,79L 1,873 L,667 1967 102,465 3,792 2,778 6,570 1968 93,673 4,175 2,986 7,161 1969 94,499 7,022 3,300 10,322 1970 87,077 7,231 3,067 10,298 1971 80,2 6 7,364 2,799 10,163 1972 72,882 7,305 2,521 9,826 1973 65,577 7,320 2,334 9,65h 1974 58,257 7,139 1,963 9,152 1975 51,068 7,047 1,695 8,742 1976 44,021 5,327 1,652 6,779 1977 38,694 4,231 1,286 5,517 1978 3b,463 4,231 1,10 5,371 1979 30,233 L,172 99h 5,166 1980 26,061 3,866 857 h,723 Table la GREECE - ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON EXTERNAL MEDIUM- AND LONG-TERM PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 1965 /1 (CONT.) Debt Repayable in Foreign Currency (In thousands of U.S. dollar equivalents) Page 7 U.S. GOVERNENT LOANS - EXIM! DEBT OUTST (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMORTI- YEAR UNDISBURSED ZATION INTEREST TOTAL 1966 23,660 1,172 689 1,861 1967 22,488 1,231 76 1,977 1968 21,257 1,291 763 2,00L 1969 19,966 2,732 965 3,697 1970 17,23h 2,740 832 3,576 1971 1,490 2,685 698 3,383 1972 11,805 2,626 565 3,191 1973 9,179 2,6h1 523 3,164 1974 6,538 2,510 297 2,807 1975 4,028 2,368 174 2,52 1976 1,66o 648 76 72 1977 1,012 357 51 L08 1978 655 357 31 388 1979 298 298 11 309 RID LOANS DEBT OUTST (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMORTI- YEAR UNDISBURSED ZATION INTEREST TOTAL 1966 39,383 -35 L35 1967 39,383 - 707 707 1968 39,383 323 978 1,301 1969 39,060 1,729 1,170 2,900 1970 37,331 1,926 1,151 3,077 1971 35,406 2,118 1,098 3,216 1972 33,288 2,118 1,033 3,152 1973 31,170 2,118 969 3,087 1974 29,052 2,118 90h 3,022 1975 26,933 2,118 840 2,958 1976 24,815 2,118 775 2,893 1977 22,697 2,118 711 2,829 1978 20,579 2,118 646 2,764 1979 18,461 2,113 582 2,700 1980 16,313 2,110 517 2,627 Table la GREECE - ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON EXTERNAL MEDIUM- AND LONG-TERM PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 1965 /1 (CONT.) Debt Repayable in Foreign Currency (In thousands of U.S. dollar equivalents) Page 8 SURPLUS PROPERTY DEBT OUTST (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMORTI- YEAR UNDISBURSED ZATION INTEREST TOTAL 1966 8,858 805 206 1,011 1967 8,053 805 186 992 1968 7,27 805 167 973 1969 6,h42 805 1h8 953 1970 5,637 805 129 93h 1971 4,832 805 110 915 1972 4,026 805 91 896 1973 3,221 805 72 877 1974 2,416 805 53 858 1975 1,611 805 33 839 1976 805 805 l 820 AGRIC. DEPT. DEBT OUTST (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMORTI- YEAR UNDISBURSED ZATION INTEREST TOTAL 1966 33,358 816 543 1,359 1967 32,562 1,756 1,139 2,895 1968 30,786 1,756 1,078 2,833 1969 29,030 1,756 1,016 2,772 1970 27,275 1,756 955 2,710 1971 25,519 1,756 893 2,610 1972 23,763 1,756 832 2,587 1973 22,008 1,756 770 2,526 1974 20,252 1,756 709 2,b65 1975 18,496 1,756 647 2,403 1976 16,741 1,756 586 2,342 1977 14,985 1,756 524 2,280 1978 13,229 1,756 L63 2,219 1979 11,473 1,756 402 2,157 1980 9,718 1,756 340 2,096 Table la GREECE - ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON EXTERNAL MEDIUM- AND LONG-TERM PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMBER 31, 1965 /1 (CONT.) Debt Repayable in Foreign Currency (In thousands of U.S. dollar equivalents) Page 9 OTHER GOVT. LOANS DEBT OUTST BG OS PRPAYMENTS DURING PERIOD (BEGIN OF PERIOD) INCLUDING AMORTI- YEAR UNDISBURSED ZATION INTEREST TOTAL 1966 62,513 4,366 2,320 6,685 1967 58,167 4,585 2,300 6,885 1968 53,562 4,561 2,112 6,673 1969 49,000 4,561 1,924 6,486 1970 44,439 4,561 1,737 6,298 1971 39,878 4,561 1,549 6,111 1972 35,316 4,561 1,362 5,923 1973 30,755 4,561 1,174 5,735 1974 26,194 4,024 99k 5,018 1975 22,170 ,024 836 4,860 1976 18,145 4,024 678 4,702 1977 14,121 4,024 520 4,544 1978 10,097 4,024 362 4,386 1979 6,073 4,024 204 4,228 1980 2,049 2,048 1,713 3,761 /1 Includes service on all debt listed on Table 1 prepared October 4, 1966 with the exception of the following: Total $30,877,000 Pre-World War II debt not yet settled 17,267,000 Debts for which the terms are not available 13,610,0o 4% Refugee loan of 1929 (Tranche of U.S.A.) 13,156,000 Other 454,000 /2 The projected payments for the dollar and sterling bonds were made on the assumption that the offer will be made permanent. Statistics Division IBRD-Economics Department October 4, 1966 Table 3 POPULATION: ECONOMICALLY ACTIVE, BY DIVISIONS OF ECONOMIC ACTIVITY AND LEVEL OF GENERAL EDUCATION: 1961 (in thousands) With "Higher" With Secondary With Primary Not Having Finished Economically Economic A,tivLt Education Education Education Primary Education Active Total Agriculture, etc. 1.7 20.1 857.2 1076.1 19550 Mining and Quarrying 0.4 1.6 10.0 9.3 21.3 Manufacturing h.3 33.2 295.6 17.7 481.0 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 84.6 46.3 159.3 Services 81.3 101.5 167.7 92.6 l3.1 Others 3.4 30.0 78.8 38.1 152.4 Total 104.5 289.3 1730.9 .1538.4 3663.1 Source: Population Census, Sample Elaboration, Volume II, pp. 27-28. Table b EMIGRATION AND ITS EFFECT ON LABOR SUPPLY March 1961 census Number of emigrated during Employed Unemployed Total Jan. 1961-June 1965 Professional, technical and related workers 121,900 2,300 127,200 b,729 Administrative and managerial workers 28,400 100 28,500 l26 Clerical workers 11,600 1,400 143,000 6,619 Sales workers 216,hOO 3,00U 219,400 2,177 Farmers, fishermen, hunters, loggers and related workers 1,91h,100 35,900 1,950,000 59,204 Miners, quarrymen and related workers 17,200 500 17,700 278 Workers in transport and communication 99,600 6,300 105,900 b,425 Craftsmen, productions process workers, laborers 625,300 59,800 685,100 17h,163 Service, national defense and recreation workers 238,900 5,700 244,600 6,335 Workers not classifiable by occupation 17,900 36,h00 54,300 12,067 Others -- 87,500 87,500 135,887 Total 3,L24,200 238,900 3,663,100 [06,310 Source: 1961 Census Sample of 2% Elaboration and Ministry of Coordination. Table 5 ANALYSIS OF GROSS EXPENDITURE OF THE ECONOMY In million Drachmas At current prices 1960 1961 1962 1963 1964* Gross national product at market prices 96.955 111.256 118.994 132.919 150.078 Net borrowing and net transfers from the rest of the world* 13.130 11.292 9.396 6.996 11.707 Means available for financing gross expenditure of the economy 110.085 122.548 128.390 139.915 161.785 Consumption 85.257 94.523 99.904 111.705 123.885 Private 73.763 82.315 86.365 96.581 106.332 Public 11.494 12.208 13.539 15,124 17.553 Gross asset formation 24.828 28.025 28.486 28.210 37.900 Private-** 19.106 18.k95 16.885 17.180 23.990 Public 6.513 7.572 8.977 8.080 9.030 Change in stocks -1.091 1.958 2.624 2.950 4.88o Gross expenditure of the economy 110.085 122.58 128.390 139.915 161.785 iFkIncluding ships the value of which is 7.670 5.550 2.740 310 1.850 * Provisional data. Source: National Accounts of Greece and Ministry of Coordination. Table 6 PERCENTAGE DISTRIBUTION OF GROSS NATIONAL EXPENDITURE At current prices 1962 1963 1964 1965(1) A. Gross Fixed Investment 18.4 17.9 19.5 20.0 1. Public Investment 7.1 5.8 5.6 5.3 2. Private Investment 11.3 12.1 13.8 14.7 Dwellings 5.4 5.5 6.1 6.3 Manufacturing and Mining 1.6 2.0 2.4 2.8 Agriculture, Forestry and Fishing 1.1 1.2 1.5 1.5 Transportation 1.2 1.4 1.6 1.3 Other 2.0 2.0 2.2 2.8 B. Consumption 79.5 80.0 77.5 76.9 1. Public 10.8 10.8 11.0 11.0 2. Private 68.7 69.2 66.5 65.9 C. Changes in Stocks 2.1 2.1 3.0 3.1 D. Gross National Expenditure 100.0 100.0 100.0 100.0 (1) Estimates. Source: National Accounts of Greece and Ministry of Coordination. Table 7 GROSS NATIONAL EXPENDITURE (Million Drachmas at current prices) Percentage 1/ Percentage Percentage 1962 1963 change 196h- change 1965* change A. Gross Fixed InvestmentY 23.122 24.950 7.9 31.170 2.9 36.270 16.6 1. Public Investment 8.977 8.080 -10.0 9.030 11.7 9.550 5.8 2. Private Investment 14.16 16.870 19.3 22.140 31.2 26.720 20.7 Dwellings 6.750 7.726 16.5 9.829 27.2 11.500 17.0 Manufacturing and Mining 2.023 2.7h 35.6 3.842 LO.0 5.070 32.0 Agriculture, Forestry and Fishing 1.365 1.672 26.3 2.313 38.3 2.750 18.9 Transporation 1.545 1.905 23.3 2.596 36.2 2.60o -7.5 Other 2.82 2.823 13.7 3.562 26.2 5.000 ho.4 B. Consumption 99.90h 111.705 11.8 123.885 10.9 139.280 12.4 1. Public 13.539 15.124 11.7 17.553 1i.6 19.900 13.L 2. Private 86.365 96.581 11.8 106.332 10.1 119.380 12.3 C. Changes in Stocks 2.62h 2.950 4.880 5.500 D. Gross National Expenditure 125.650 139.605 11.1 159.935 1L.5 181.050 13.2 1/ Preliminary. _/ Excludes transfer of ships. *Estimates. Source: National Accounts of Greece and Ministry of Coordination. Table 8 GROSS DOMESTIC PRODUCT AND NATIONAL INCOME In million Drachmas At current prices Sectors 1960 1961 1962 1963 1964* 1. Agriculture, forestry, and fishing 22.994 29.007 26.700 32.1L9 35.102 2. Mining and quarrying 1.091 1.168 1.195 1.292 1.557 3. Manufacturing 16.010 17.023 184.6 20.335 22.922 4. Electricity, gas and water works 1.317 1.622 1.823 2.111 2.403 5. Construction h.935 5.489 5.928 6.310 7.607 6. Transportation and communication 6.515 7.284 7.842 8.561 9.243 7. Wholesale and retail trade 9.068 9.981 10.749 11.994 13.588 8. Banking, insurance and real estate 2.201 2.536 2.784 3.170 3.478 9. Ownership of dwellings 5.888 6.599 7.434 8.343 9.350 10. Public administration and defense 7.257 7.789 8.885 9.249 10.415 11. Health and educational services 3.007 3.287 3.697 4.20h 5.046 12. Other services 3.760 4.030 4.270 4.670 5.010 13. Gross domestic product 8k.043 95.815 101.371 112.388 125.721 1. Net incomes from the rest of the world 2.018 2.659 3.260 4.130 5.162 15. Gross national income 86.061 98.474 10.631 116,518 130.883 16. Less: Depreciation k.704 5.057 5.723 6.319 7.202 17. Net national income 81.357 93.417 98.908 110.199 123.681 *Provisional data. Source: National Accounts of Greece and Ministry of Coordination. Table 9 PERCENTAGE STRUCTURE OF GROSS FIXED CAPITAL FORMATION, EXCLUDING SHIPS At current prices 1960 1961 1962 1963 1964 Agriculture, animal breeding, forestry and fishing 17.9 17.0 13.8 14.2 12.7 Mining and quarrying 0.6 0.6 0.6 1.5 1.2 Manufacturing 10.0 10.5 13.4 12.0 11.5 Electricity, gas and water 8.2 7.1 8.5 7.4 9.0 Transportation and Communication 20.0 19.7 19.8 18.6 19.2 Dwellings 29.8 30.9 30.3 32.0 32.7 Public Administration 1.5 1.1 1.0 1.0 0.7 Other Industries 12.0 13.1 12.6 13.3 13.0 Total 100.0 100.0 100.0 100.0 100.0 Amount in million drachmas 18.249 20.517 23.122 24.950 31.170 Source: National Accounts of Greece and Ministry of Coordination. Tnble 11 GENERAL INDEX OF VMOLESALE PRICES (Base 1952 - 100) Year Beverages Raw Materials Finished rnc General Foodstuffs and and Fuels Goods Month Tobacco Semi-finished Goods 196? 153.2 15o.4 165.6 150.0 132.2 138.7 1961 155.6 153.7 167.B 151.1 182.2 1h1.5 1962 156.5 152.0 172.0 168.6 1B2.0 IhO.8 1963 153.9 166.2 194.9 167.7 177-3 142.5 196L 170.6 170.0 229.6 152.2 178.h 145.L 1965 177.2 178.1 228.5 158.2 190.8 18.3 Table 10 CONSUMER PRICE INDEX 1/ (Base: June 1959 - 100) Year Alcohol Clothing . Housebold Medical & Education Transport and General Foodstuffs Beverages and Housing Equipment Personal and. Communication Miscellaneous Month & Tobacco Footwear Care Recreation 1960 102.3 102.1 100.9 100.2 103.6 99.9 101.2 100.7 112.8 101.6 1961 lOb.1 106.8 106.3 99.4 105.1 101.6 103.L 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 12+3 106.9 109.3 112.5 99.3 109-5 100.2 109.0 98,7 116.0 100.5 1 1 107.8 110.2 118.3 100.3 111.L 99.1 110.8 96.6 115.5 100.2 19ut 111.0 115.3 126.9 101.6 112.6 99.9 115.2 92.5 117.h 103.8 1966 FeD. 113.8 120.3 127.0 98.1 115.2 102.0 118.5 98.0 118.6 106.4 1 For urbin areas only (i.e. toins with 10,000 inhabitants and over in the 1951 populition census); yearly Pverages. Source: National Statistical Service of Greece. Table 12 CROP OUTPUT, 1955-1965 CO tons Percent Increase Crop 1955 1960 1965 1955-1965 Tobacco 97 64 120.9 25 Cotton (seed) 189 184 200.0 6 Olive Oil 117 88 197.0 68 Olives 23 23 62.0 169 Cereals Wheat 1,337 1,666 1,988.6 51 Barley 224 240 b11.0 83 Maize 285 288 298.4 5 Oats 157 149 177.0 13 Rice 61 55 103.2 68 Fruits currants 65 9h 79.0 22 Sultanas 42 26 95.0 111 Oranges 297.0 Lemons 98.0 Apples 90 165.9 Peaches 61 93.4 Melons h05 375 509.0 Vegetables Potatoes 422 423 589.0 LO Tomatoes 329 b62 548.0 66 Sugar beet 669.0 Fodder Alfalfa 563.0 836.0 Legumes 276.2 412.3 Source: Ministry of Agriculture and Agricultural Statistics. Table 13 EXPORTS OF MAIN AGRICULTURAL PRODUCTS (In thousand metric tons) Commodity 1960 1961 1962 1963 1964 1965* Tobacco 61.0 65.9 47.4 61.9 70.2 60.8 Currants 69.3 57.8 67.0 70.3 54.4 56.3 Sultanas 36.2 40.6 56.2 65.8 60.2 60.9 Cotton 31.2 38.6 64.2 50.8 51.3 27.2 Citrus 5.9 64.1 79.9 82.0 68.1 86.5 Olive Oil 8.5 0.3 8.1 2.7 0.4 2.9 * January - November Source: Greek Production and Exports in Figures and Monthly Bulletins of External Trade. Table 14 CHANGES IN EXPORT OUTLETS FOR MAIN CROPS, 1962-1965 Percentages E. E. C. Eastern Bloc U. S. A. Other Products 1962 1965 1962 1965 1962 1965 1962 1965 Tobacco 35 39 17 23 33 23 15 16 Cotton 23 8 [3 67 -- 2 3h 23 Dried fruit 30 35 13 20 3 2 5h 43 Citrus fruit 7 10 64 66 -- b 29 20 Source: Bank of Greece. Table 15 CHANGES IN AGRICULTURAL IMPORTS AND EXPORTS, 1961-1965 Million Drachmas 1956-1958 Avg. 1961 1962 1963 1964 1965 Agricultural Exports 5032 5368 6185 6900 7100 7093 Agricultural Imports 3267 2837 2557 3417 3968 5h60 Net Contribution to Balance of Trade 1765 2031 3628 3483 3132 1633 Agricultural Exports 100 106 123 137 141 11 Agricultural Imports 100 87 78 105 121 167 Agricultural exports as percent of total exports and receipts from invisibles - 32% 33% 31% 30% 27% Source: National Statistical Service of Greece. Table 16 VALUE OF AGRICULTURAL MACHINERY, 1960 and 1965 Million Drachmas Category 1960 1965 Tractors (2 axle) 2,074 3,888 Tractors (1 axle) 172 592 Wagons 506 1,007 Ploughs, harrows, etc. 656 1,354 Harvesters 910 1,736 Irrigation equipment 203 1,178 Crop protection equipment 96 319 Total 4,617 10,074 Source: Ministry of Agriculture. Table 17 LAND CONSOLIDATION, 1993-1961 Average size Average no. of fragments per hldg. No. of of holding Before After Year land holdings (ha.) consolidation consolidation 1953-56 8,506 3.3 22.3 1.7 1959 2,018 3.3 14.0 1.7 1960 5,826 3.1 17.1 2.4 1961 5,175 3.4 8.8 1.3 Source: Ministry of Agriculture. Table 18 LOANS BY THE AGRICULTURAL BANK OF GREECE-MOUNT ADVANCED FOR EACH CATEGORY, 1960 - 1965 Million Drachmas Short-term Loans Medium- and Crop Collateral Farmers' Coops. Long-term Loans Total Year Drs. % Drs. % Drs. % Drs. % Drs. 1960 2,747 49 544 9 1,172 21 1,174 21 5,637 1961 2,839 8 667 11 1,282 22 1,109 19 5,897 1962 2,750 h8 865 15 1,287 23 808 1 5,710 1963 3,106 47 1,134 17 1,h26 21 992 15 6,658 1964 3,357 42 1,147 l4 2,045 26 1,A24 18 7,973 1965 3,545 39 1,053 11 2,930 32 1,685 18 9,213 Source: Agricultural Bank of Greece. Table 19 SUMARY OF COST OF DIRECT AGRICULTURAL SUPPORT, 1965 & 1966 Million Drachmas Support Measures 196$ 1966 (Forecast) For crop and livestock production 569 560 On means of production 414 766 Export incentives 204 147 Deficits on special accounts 1053 566 Total 2240 2039 Source: Ministry of Agriculture. Table 20 CREDIT TO AGRICULTURE AND FISHING (Outstanding credits at the end of period) Million Drachmas 1960 1961 1962 1963 1964 1965* GRAND TOTAL 8,193.9 9,271.9 9,940.9 10,761.8 12,063.7 13,811.0 Short-term Credits Total 4,938.1 5,621.9 6,071.0 6,675.8 5,990.9 6,762.0 Cultivation loansi/ 3,113.4 3,269.9 3,076.1 3,750.6 2,871.6 3,036.0 Collateral loans 1,585.8 2,109.8 2,778.6 2,684.7 2,828.3 3,387.0 Other 238.9 242.2 216.3 240.5 291.0 339.0 Medium and long-term loans Total 2,51.9 3,061.6 3,168.1 3,419.8 3,701.3 4,277.0 For land improvement 2,354.4 2,900.2 3,009.5 3,260.9 3,556.5 4,lol.0 To fishing industry 160.5 161.4 158.6 158.9 144.8 176.0 Agricultural Supplies 7b0.9 588.4 701.8 666.2 976.0 1,196.0 Outstanding debts to the Agricultural Bank under Settlement -- -- -- -- 1,395.5 1,576.0 * Provisional figures. 1/ Credits to livestock-breeders are also included. Source: Bank of Greece. Table 21 STRUCTURE OF MANUFACTURING INDUSTRY VALUES AND PERCENTAGE COMPOSITION OF OUTPUT (GDP) (Million Drachmas at current prices) Percent- Percent- Percent- Percent- Percent- 1954 age 1957 age 1960 age 1963 age 1964* age a. Food, drin nd tobacco 2,163 23.2 3,10% 23.9 3,695 23.1 4,764 23.4 5,291 23.1 b. Textiles 1,489 16.0 1,965 15.1 2,197 13.7 2,602 12.8 2,954 12.9 c. Clothing 1,541 16.5 1,896 .14.6 2,038 12.7 2,243 11.0 2,449 10.7 d. Wood 719 7.7 1,002 7.7 1,195 7.5 1,448 7.1 1,568 6.8 e. Paper 38b 4.1 527 4.1 803 5.0 1,016 5.0 1,093 4.8 f. Chemicals 1,031 11.0 1,527 11.8 1,908 11.9 2,505 12.3 2,700 11.8 g. Stone, claysand glass 477 5.1 732 5.6 832 5.2 1,197 5.9 1,428 6.2 h. Basic metal industries 157 1.7 228 1.8 330 2.1 "h9 2.2 692 3.0 i. Metal manufacture engineering and electrical goods 947 10.1 1,339 10.3 1,901 11.9 2,501 12.3 2,949 12.9 j. Trnsport equipment 186 1.9 365 2.8 622 3.9 972 4.8 1,077 4.7 k. Other manufacturing 248 2.7 298 2.3 489 3.0 638 3.2 721 3.1 Total 9,342 100.0 12,9864 100.0 16,010 100.0 20,335 100.0 22,922 100.0 *Provisioral data. Source: National Accounts of Greece. Table 22 TRANSPORT Goods and Interurban Passenger Traffic Railways Buses Maritime (1) Goods Passengers Passengers Goods Ton Ton Km Number Pass Km Number Pass Km in Tons in millions 1958 2.2 363.0 11.1 850.8 62.0 1646.0 2.49 1959 2.1 360.9 11.7 983.0 61.5 1665.2 2.84 1960 2.2 362.3 11.4 1008.5 70.2 1837.4 3.02 1961 2.6 410.1 11.5 1028.7 78.1 2064.1 3.43 1962 2.7 416.9 11.5 1044.5 86.3 2368.3 3.33 1963 2.8 445.4 11.0 1005.7 90.6 2773.5 3.37 1964 3.3 546.2 11.2 1077.9 100.4 3116.0 3.75 Vehicles Trucks Buses Pass. Cars Motorcycles Total 1956 21.540 5653 22700 12051 61944 1961 40.030 6981 48834 33303 129148 1962 44.332 7480 56893 37498 146203 1963 h9,221 7896 67576 41719 166412 1964 57.657 8176 81617 44471 191921 (1) Coastwise traffic. Source: National Statistical Service of Greece. Table 23 CONSOLIDATED BALANCE SHEET OF THE MONETARY SYSTEM 1/ (Billion Drachmas - End of Period) 1960 1961 1962 1963 19642/ 1965 ASSETS Claims in foreign exchange, net 6.4 7.7 8.6 9.9 8.2 7.4 Claims on Government, including state enter- prises, net 12.6 14.3 15.2 18.1 24.4 29.2 Claims on private sector 26.8 29.8 34.7 b1.3 b6.8 51.1 Total Assets 46.8 51.8 58.5 69.3 79.4 87.7 LIABILITIES Money Supply of which: 15.5 17.8 20.5 23.6 28.2 32.3 currency in circulation 10.5 12.2 14.4 16.3 20.2 22.3 sight deposits 5.0 5.6 6.1 6.8 5.0 9.0 Other Deposits 19.5 23.5 29.4 35.7 ho.3 43.9 Deposits from counterpart funds 2/ h 4.5 2.1 1.6 0.1 -- Capital and reserves 4.9 5.3 6.1 7.2 10.1 11.2 Other liabilities net 1.5 0.7 0.4 1.2 0.7 0.3 Total Liabilities 45.8 51.8 58.5 69.3 79.4 87.7 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, and, from 1962, the Agricultural Bank of Greece. 3/ Starting 1964 assets and liabilities of the Industrial Development Corporation are included after the merger of I.D.C. and E.D.F.O. into the Hellanic Industrial Development Bank. Source: Bank of Greece. Table 24 FACTORS AFFECTING MONET SUPPLY () Money supply increase (-) Money supply decrease (illion Drachms) 1960 1961 1962 1963 196h 1965 A. PUBLIC SECTOR / 3,373 /2,357 1,433 /3,117 (6,881 /5,561 I. Central Government (excluding foreign borrowing and transfer from counterpart funds) /2,923 /2,855 /1,909 42,324 /6,781 /5,332 II., Public Entities - 84 - 867 - 825 - 449 - 353 - 112 III& Public Enterprises / 534 / 369 / 349 1,242 / 53 / 341 B. PRIVATE SECTOR 41,059 428 / 659 / 626 X1,515 /1,098 I. Loans and advances /3,379 /3,056 /4,889 /5,970 15,654 /,172 II. Securities / 169 / 165 / 482 / 217 - 267 / 179 III. Deposits -2,489 -2,793 -h,712 -5,561 -3,872 -3,253 C. FOREIGN SECTOR -1,200 -1,060 X 530 / 355 -2,878 -1,458 D. OTHER ITEMS - 753 /557 /50 - 985 - 95h -1,06 CHANGES IN MONET SUPPLY /2,479 /2,302 /2,672 13,113 A,564 /,155 Source: Bank of Greece. Table 25 DEPOSITS WITH THE BANK OF GREECE (Million Drachmas) 1960 1961 1962 1963 1964 1965 Individuals and Private Enterprises Public Enterprises and Public Entities, of which: 4,387.3 5,526.3 6,576.5 6,838.2 8,055.5 8,548.7 Individuals and private enterprises 702.3 750.0 692.5 695.8 1,140.6 985.5 Public entities 3,636.5 4,735.1 5,796.0 6,034.6 6,846.3 7,515.2 Commercial Banks and Special Credit Institutions: 2,609.0 3,610.1 3,700.1 4,4o.0 h,423.3 4,661.9 Commercial banks 1,676,6 2,296.6 2,484.3 2,563.1 2,205.3 2,147.8 Non-interest bearing Obligatory 910.3 1,052.9 1,122.4 1,123.2 928.8 1,100.6 Current accounts 268.8 469.5 569.4 520.1 458.2 725.3 Other - - 68.6 128.1 98.4 104.9 Interest bearing Seasonal obligatory 92.3 436.4 LL4.5 638.8 688.3 - For long-term loans 5.2 137.8 279.4 152.9 31.6 217.0 Other 400.0 200.0 - - - - Agricultural Bank of Greece 110.1 153.1 125.5 549.1 622.9 312.2 Consignment and loans fund - Postal Savings Bank 744.7 900.5 867.h 1,094.2 1,578.5 2,105.0 Hellenic Industrial Development Bank and other investment banks 19.8 181.1 164.3 171.4 30.7 0.6 Mortgage bank 57.8 78.8 58.6 23.2 - 14.1 96.3 Source: Bank of Greece. Table 26 DEPOSITS WITH COMMRCIAL BANKS AND SPECIAL CREDIT INSTITUTIONS (Million Drachmas) 1960 196. 1962 1963 1964 1965Y GRAND TOTAL: 18,633.7 22,137.2 27,460.5 34,158.6 38,603.3 42,937.3 Individuals and Pri- vate Enterprises Total: 16,632.4 19,721.9 24,732.9 30,649.3 34,042.0 38,008.5 Sight 3,462.3 3,846.3 4,108.7 4,667.2 5,104.0 5,732.4 Savings 10,834.5 12,863.1 15,525.8 19,824.2 22,768.0 25,316.5 Time 1,137.1 1,479.2 3,542.4 4,736.2 h,122.5 4,502.4 Restricted 1,198.5 1,533.3 1,556.0 1,641.7 2.047.5 2,457.2 Public Enterprises 149.0 224.5 134.7 154.7 114.0 18.1 (sight) Public Entities Total: 1,852.3 2,190.8 2,592.9 3,354.6 4,447.3 4,744.7 Sight deposits 561.1 670.2 756.6 860.7 1,141.2 1,474.0 Time 125.3 211.6 330.0 644.0 873.2 470.2 Other 1,165.9 1,309.0 1,506.3 1,89.9 2,433.1 2,799.8 * Provisional figures. Source: Bank of Greece. Table 27 TOTAL CREDIT BY SOURCE I/ (outstanding credits at end of period) Million Drachmas 1960 1961 1962 1963 1964 1965* GRAND TOTAL 28,695.7 32,387.4 37,836.3 45,245.3 51,698.3 56,921.0 Bank of Greece Funds Total 9,409.8 11,028.0 11,503.1 13,093.0 14,396.7 16,375.0 Public entity deposits 1,796.9 2,726.9 3,001.5 3,221.9 3,909.8 3,888.0 Other funds 7,612.9 8,301.1 8,501.6 9,871.1 10,486.9 12,487.0 Commarcial Bank Funds 11,435.8 12,802.3 16,064.6 20,854.3 23,315.7 24,468.0 Special Credit Institutions FuTds 2/ Total 6,810.2 7,627.2 9,438.2 10,604.1 13,305.3 15,520.0 E.D.F.O. 3,117.5 3,173.5 3,451.7 3,636.2 4,123.5 4,209.0 Agricultural Bank 1,748.4 1,983.1 2,993.8 3,517.2 4,473.0 5,296.0 Mortgage Bank 210.2 224.6 267.2 301.5 248.2 302.0 Other Institutions 1,733.8 2,246.0 2,725.5 3,149.2 4,060.6 5,713.0 Government Funds 1,039.9 929.9 830.4 693.9 680.6 558.0 * Provisional figures. 1/ Credits to the Central Government are not included. 2/ Deposits and own capital. Source: Bank of Greece. Table 28 TOTAL CREDIT BY SECTORS AND BRNCHES 1/ (Outstanding credits at the end of period) Million Drachmas 1960 1961 1962 1963 1964 1965* GRAND TOTAL 2/ 28,695.7 32,387.4 37,836.3 45,245.3 51,698.3 56,921.0 Private Sector Total 26,494.0 29,570.2 34,458.7 40,429.2 46,216.6 50,867.0 Agriculture 8,193.9 9,271.9 9,940.9 10,761.8 12,063.7 13,811.0 Manufacturing 10,910.6 12,165.6 14,151.1 16,764.9 19,043.8 20,964.0 Trade h,282.7 ,481.6 6,135.7 7,688.9 8,381.2 8.717,0 Housing 1,346.2 1,541.1 1,787.0 2,026.4 2,552.1 3,130.0 Other 1,758.6 2,130.0 2,44h.0 3,187.2 3,775.8 4,245.0 Public Enterprises 1,019.4 1,299.2 1,513.5 2,669.9 3,087.7 3,360.0 Public Entities 1,182.3 1,518.0 1,864.1 2,146.2 2,394.0 2,694.0 * Provisional figures. 1/ Credits to the Central Government are not included. 2/ Credits by the Bank of Greece, commercial banks, the Agricultural Bank, the Economic Development Financing Organization, the Consignment and Loans Fund and the Postal Savings Bank. Source: Bank of Greece. Table 29 INTEREST RATES ON BANK CREDITS (Percent per annum) March April Oct. April Nov. March April Oct. Jan. 1957 1959 1959 1960 1960 1961 1963 1963 196L Bank of Greece re- discount rate 11 10 9 7 6 6 5.5 5.5 5.5 Industry Bills discounted 10 9 8 8 8 8 7.5 7.5* 7.-5 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* Imort 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 h.25 Medium and Long-tem Loans 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 cooperatives 7.25 7.25 7.25 7.25 7.25 6.25 6.25 6.25 3.5 Penalty rates on de- layed repayments to Agricultural Bank 12 12 12 12 12 9 9 9 7 Housing Loans 9-10 9-10 8-9 8-9 8-9 8-9 8 8** 8** * In respect of credits to industries exporting a minimum fixed percentage of out- put, interest plus commission amounts to between 4 and 6 percent. *w On housing loans to civil servants: 6 percent interest. In other special cases: 3 to 6 percent. Source: Bank of Greece. Table 30 NEW ISSUES CF SECURITIES (Million Drachmas) 1957 1958 1959 1960 1961 1962 1963 196h 1965 Bonds Public Pouer Corporation 90 190 300 580 740 500 -- 800 800 Government -- -- -- 750 -- 990 1,500 600 -- Private enter- prises -- -- -- -- -- 110 22 107 -- Total: 90 h90 300 1,330 740 1,6oo 1,522 1,507 800 Shares Banks -- -- -- -- 52 542 -- 52 24 Enterprises 4 64 7 51 87 50 38 71 2I6 Total: 4 6h 7 51 139 592 38 123 270 General Total: 9h 55h 307 1,381 879 2,192 1,560 1,630 1.070 Source: Bank of Greece. Table 31 CENTRAL GOVERNMENT BUDGET (Consolidated) (Million Drachmas) 1960 1961 1962 1963 196h 1065 19661/ Ordina- rz .-ie 15,909 18,305 20,058 21,698 2h,781 28,179 32,500 Ordinary expenditure, excluding expenditure on NATO lb,350 16,253 17,968 20,032 23,983 28,100 30,300 Surplus 1,599 2,052 2,090 1,666 798 79 2,200 Contributions from other accounts, net - 153 47 98 687 1,279 1,2hL 1,000 Proceeds from State loans and treasury bills 995 1,130 2,074 2,100 1,800 1,000 2,100 Investm-nt financing from domestic sources 2,441 3,229 4,262 4,453 3,877 2,323 5,300 Investment expenditure total 4,122 5,056 5,850 5,055 5,372 5,361 6,500 overall dpficits 1,681 1,827 1,588 602 1,h95 3,038 1,200 Bank of Greece advances 142 -- -- 671 -- 1,607 -- Foreign sources, total 1,539 1,827 1,588 131 1,495 1,431 1,200 1/ Budget estimates. Source; MLriiery of Fnance and Ministr. I Coordination. Table 32 CENTRAL GOVERNMENT CURRENT EXPENDITURE (Million Drachmas) 1960 1961 1962 1963 196L 1965* 1. Remuneration of civil servants 2,990 3,181 3,656 4,001 6,746 5,33L 2. Remuneration of the members of Armed Forces and the public Security Forces 2,239 2,406 2,b50 2,679 2,963 3,231 3. Pensions 1,982 2,192 2,334 2,426 2,749 3,085 6. Money supports, of which: Provision of fertilizers 15 15 16 10 21 21 Covering deficit of consumer goods account 107 - 2h 90 320 00 Covering deficit of the account concerning collection of tobacco, currants and other agricultural products 100 193 98 620 952 1,530 Other money supports 34 36 98 89 75 123 Covering railway deficit 458 454 56 481 9 566 5. Subsidies and subscriptions to: Comunal health and insurance council 699 772 907 1,050 Social welfare institutions and organizations 922 1,219 213 247 372 599 Other subsidies 779 864 1,395 1,515 6. Restitution of amounts collected on account of third parties: to municipalities and communes 315 430 51l 500 560 560 In favor of the National Crop and Social Insurance Agency, ete. 460 828 851 980 1,109 Other restitutions 306 361 638 490 499 652 7. Public debt 589 72h 1,085 1,423 1,591 2,053 8. Expenditure for the settlement of earthquake victims 49 19 30 27 28 12 9. Expenditure for the participation of Greece in NATO 114 127 209 228 232 216 10. Other expenditures L,130 4,436 3,948 3,845 4,807 5,693 16,350 16,253 17,673 19,683 23,646 27,729 11. Investment expenditures through ordinary budget 295 369 337 371 16,350 16,253 17,968 20,032 23,983 28,100 12. For works of common interest with NATO 595 451 315 299 470 563 TOTAL 1I,96 16,706 13,283 20,331 26,453 :3,663 *Pre limary. Source: Ministry of Finance and Ministry of Coordination. Table 33 CENTRAL GOVERNMENT CURRENT EXPENDITUR-3 BY MINISTRTES, FISCAL YEARS 1260-196$ Million Drachmas 1960 1961 1962 1963 1964 1965* 1. Parliament 79 81 85 89 100 155 2. Prime Hirister's Office 87 199 189 190 200 247 3. General Secretariat for Athletics 57 62 60 79 64 60 4. 'inistry of Finance 4,375 4,933 5,668 6,133 7,069 8,19 . Ministry of Coordination 183 234 211 238 202 206 6, Ministry of Foreign Affairs 237 210 284 230 325 391 7. Ministry of Justice 334 350 374 408 514 563 8. Ministry of Interior 465 626 772 856 934 896 9. Ministry of Public Security 1,088 1,164 1,240 1,366 1,534 1,651 10. Ministry of Public Works 300 334 353 365 390 413 11. Ministry of Transport 330 374 392 436 481 526 12. Ministry of National Education and Religion 1,513 1,615 1,803 2,o64 2,769 3,434 13. Ministry of Commrce 287 267 199 785 426 519 14. Ministry of Industry 42 96 96 116 134 11 15. Ministry of Labor 47 72 75 75 69 300 16. Ministry of Agriculture 409 928 1,270 1,342 2,736 3,476 17. Ministry of Social Welfare 1,028 1,199 1,366 1,528 ( 480 561 18. Miinistry of Hygiene ( 1,398 1,742 19. Ministry of National Defense 3,408 3,464 3,Uth 3,642 4,021 4,510 20. Ministry of Mercantile Marine 81 85 87 90 97 114 1,350 16,253 17,968 20,032 23,983 28,100 Expenditures for Toorks of common interest vith NATO 595 451 315 299 VO 563 TOTAL 14,945 16,704 18,283 20,331 24,453 28,663 Note it;cluding NATO common interest expenditures. * reliminary Source: Ministry of finance and Ministry of Coordination. Table 34 CENTRAL GOVERNMENT CURRENT REVENUE Million Drachmas 1960 1961 1962 1963 1964 1965 FROK D14ESTIC sOURCES 15,207 17,757 19,518 21,383 24,748 28,179 Direct taxes 2,628 3,226 3,590 3,606 6,467 4,493 Income tax 1,957 2,415 2,634 2,532 3,208 3,0h6 Income tax of individuals 1,512 1,851 1,989 1,889 2,38h 2,204 Income tax of legal entities 251 328 369 380 478 566 Other income taxes 194 236 276 263 366 276 Property tax 238 243 273 312 399 499 Back taxes and arrears due 376 360 387 441 465 516 Taxes in favor of third parties l/ -- 143 222 235 289 302 Other direct taxes 57 65 74 86 1o6 130 Indirect taxes 10,384 11,936 13,234 15,005 17,204 20,366 Revenue from customs 4,635 5,278 5,907 6,482 7,550 9,115 Consumption taxes 3,570 3,765 4,065 4,683 5,298 6,196 Transaction taxes 1,863 2,054 2,290 2,650 3,071 3,496 Back taxes and arrears due 204 229 21A 376 41l 40h Taxes in favor of third parties 2/ 112 610 728 814 874 1,153 Other revenue excluding taxation 2,195 2,595 2,694 2,772 3,077 3,320 FROM FOREIGN SOURCES 742 548 540 315 33 Total 15,9h9 18,305 20,058 21,698 24,781 28,179 1/ Additional tax on the income of physical persons and legal entities on account of the National Crop and Social Insurance Agency. 2/ In favor of the National Crop and Social Insurance Agency, Tourism, Athletics and other third parties. Source: Ministry of Finance anu Ministry of Coordination. Table 3 CENTRAL GOVEINMENT TNVEST4ENT EXPENDITURES BY BRANCHES CF ECON41C ACTIVITY (Million Drachmas at current prices) 1960 1961 1962 1963 1964 1965 1966 Agriculture 326 322 239 248 246 173 627 Livestock production, forestry and fishing 90 93 115 169 204 171 223 Land amelioration works 622 8o6 976 1,07 1,039 1,010 1,205 Mines, quarries and salt pans 6 18 19 4O 23 58 100 Manufacturing 537 729 1,324 99 346 69 550 Transportation (except railways) 1,234 1,457 1,231 1,l40 1,959 2,139 1,798 Railways 92 216 243 146 16 269 388 Tourism, museums and monumnts 259 294 597 207 196 300 565 Education 101 161 173 23 432 422 550 Building and Mousing 6 34 41 33 52 193 386 Health and social welfare 32 42 54 43 71 50 85 Water supply and drainage 13 27 18 2 8 54 143 Public administration 64 55 68 57 59 95 270 Technical assistance 33 37 25 29 26 46 95 Works carried out by the departmental authorities 640 671 560 Loo 303 94 296 Other 65 94 164 21,7 232 159 331 Total 4,120 5,056 5,847 5,020 5,341 5,302 7,612 1/ 1/ Total appropriations; ceiling of total payment Drs. 6500 million. Source: Ministry of Finance and Ministry of Coordination. Table 36 PUBLIC INVESTMENT EXPENDITURES (1964 compared with 1970 projections in the Draft Economic Development Plan 1966-70) Million Drachmas at 1965 prices Average Amount % Distribution Annual Industries 1964 1970 1964 1970 Rate of Change 196h-1970 1. Agriculture, Animal Husbandry Forestry, Fishing 1,686 4,300 18.0 18.7 17.0 2. Wining 21 800 0.3 3.5 83.4 3. Manufacturin 73 100 0.8 0.4 5.4 4. Public Utilities 2,771 4,700 29.7 20.4 9.2 a) Energy 2,403 3,600 26.4 15.6 7.0 b) "ater & Drainage 368 1,100 3.3 4.8 20.0 5. Transport & Communications 3,50 7,200 37.5 31.3 12.8 a) Transport 2,765 6,150 30.0 26.7 14.3 b) Communications 739 1,050 7.5 4.6 6.1 6. Housing 388 1,100 4.3 .8 19.0 7. Shops - - - - 8. Tourism 125 600 1.6 2.6 30.0 9. Other Services 732 4,200 7.8 18.3 33.5 a) Education Wb7 2,600 4.8 11.4 37.2 b) Applied Scientific Research - 400 - 1.7 - c) Health & Welfare 51 800 0.5 3.5 58.2 d) Public Administration 234 400 2.5 1.7 9.4 10. Non-distributed - - - - - (1-10) T o t a 1 9,300 23,000 100.0 100.0 16.1 Source: Center of Planning and Economic Research - Draft of the Five Year Economic Dvelopment Plan for Greece (1966-67). Table 37 FINANCING OF CENTRAL GOVERNMENT INVESTMENTS (Million Drachmas) 1960 1961 1962 1963 196h 196511 1966h Total L,122 5,056 5,580 5,055 5,372 5,361 6,500 A. Domestic Sources 2,58 3,229 4,262 L,92h 3,877 3,930 5,300 1. Special investment revenue 530 592 637 563 7b7 1,036 1,000 2. From public Power Corporation -- 100 -- -- .. .. .. 3. Proceeds from State loans and Treasury Bills 995 1,130 2,074 2,100 1,BO 1,000 2,100 b. Contribution of current budget: 917 1,h07 1,551 1,810 1,330 288 2/ 2,200 5. Bank of Greece advances 142 -- -- [71 -- 1,607 7/ -- B. Foreign Sources 1,539 1,827 1,588 131 1,h95 1,431 1,200 1. AID 72h 6h4 618 73 30 129 a. U.S. Government 696 625 595 32 10 121 b. International Organizations 28 19 23 LO 20 9 2. LOANS 510 1,176 541 58 1,429 1,301 a. U.S. Government -- 353 118 2L --4 b. German Government 715 793 271 5 -- -- C. French Government -- -- 132 16 -- -- d. International Organizations 95 30 20 12 1,h29 808 3. Special advances by Bank of Greece against non-released aid -- -- 100 - - -- 4. Reparations h 7 330 -- 37 1 1/ Preliminary. 2/ Including transfer from 196h budgets. 3/ To be covered by foreign loans TT Forecast. Source: Ministry of Coordination and Ministry of Finance. Table 38 RALANCE OF PAYMENTS Millions of U.S. Dollars 1960 1961 1962 1963 196h 1965 A. GOODS AND SERVICES Exports f.o.b. 210.0 21h.9 2h2.6 296.0 OS.L 330.9 Imports c.i.f. -520.3 -555.1 -690.3 -768.6 -882.1 -1030.5 Trace bslance -11 -350.2 -467.7 -452.h -573.7 - 690.6 Transportation 70.1 90.8 93.6 109.6 132.1 165.5 Travel 30.5 43.2 56.2 67.9 52.3 66.1 Government, n.i.e. 18.1 13.4 11.6 12.6 - 6.8 - 3.2 Other services 6.0 3.8 15.8 60.7 60.9 79.5 Total 187.6 -199.0 -273.1 -221.8 -335.2 - h11.7 B. MISCELLANEOUS TRANSFER PAYMENTS Emigrants' remittances 90.6 98.3 117.2 128.5 116.5 128.5 Other 9.3 9.5 69.0 13.5 8.6 9.2 Total 99.7 107.8 166.2 162.0 126.9 137.7 C. PRIVATE CAPITAL TRANSACTIONS Suppliers' credit 7.8 6.0 31.8 23.2 32.1 37.8 Other 28.5 66.8 71.3 82.5 105.5 159.8 Total 36.3 52.8 103.1 105.3 135.6 197.6 D. OFFICIAL LOANS AND GRANTS Economic and technical assistance grants (net)32.5 29.3 25.8 29.9 5.5 8.0 Drawings on loans received 26.9 49.9 20.0 26.1 85.5 b6.3 Repayments on loans received and retirements of securities - L.7 - 6.8 - 8.5 -10.6 -12.0 -10.6 Repayments on post-EPI debts (net) and other consolidated claims 1.6 1.3 - 1. - 2.9 0.2 - 2.2 U.';. Government holdings of drachmas 5.6 2.? - 5.3 - 2.2 - 0.6 - . IL: accounts --- --- 0.2 --- --- --- Total 59.7 73.1 30.8 38.3 78.6 35.8 Table 38 (Gmnt'd) BALANCE OF PAYMENTS Millions of U.S. Dollars 1960 1961 1962 1963 1964 1965 E. MONET,R MOVE'ENTS ommerical banks' short-term liabilities - 1.6 5.7 6.9 4.5 5.2 3.1 Commerical bar.ks' short-term assets - 3.4 - 2.6 - 8.8 - b2.7 30.1 - 10.3 Payments agreements and EMA accounts (net) 10,6 0.6 - 9.6 - 5.8 - 1.8 L.5 U.S. dollar balances (increase -) 100.9 -38.6 -25. - 36.9 7.0 54.1 OLher short-term claims -65. 22.2 - 3.7 29.0 4.6 - 23.0 Monetary gola -50.5 -10.8 9.7 -0.1 --- - 0.1 Total - 9,h -23.3 -30.9 - 52.0 45.1 28.3 F. NET ERRORS AND OMISSIONS 1.3 -11.7 319 - 11.8 -488 12.3 0. YEAR-ENF FOREIGN EXCHANGE RESERVES 223.5 250.5 269.9 277.8 266.2 235.2 Source: Rased on data in IMF Balance of Payments Yearbooks. Table 39 EXPORTS BY MAIN CATEGORIES AND BY GEOGRAPHICAL AREAS Percentages BY CATEGORIES 1955 1956 1957 1958 1959 1960 1961 1962 1963 196b 1965 I. Food and Beverages 23 22 28 32 30 27 26 29 24 26 31 (a) Currants and sultanas lb 13 lb lt l 13 12 12 11 12 13 (b) Fruits 2 3 5 4 6 5 7 8 6 6 8 IT. Tobacco 38 31 39 38 33 35 35 28 43 38 34 III. Raw Materials 18 2h 14 16 21 20 23 25 20 19 1 Cotton 11 lb 6 9 12 9 12 16 12 11 6 IV. Minerals and Ores 6 8 7 6 7 9 6 6 5 7 7 V. MAnufacturers and Handicraft Articles 2 3 3 2 4 4 3 5 3 6 8 Textiles Neg. 1 2 1 Neg. 1 1 2 1 2 2 71. Others (Including NATO Procurements) 13 12 9 6 5 5 7 7 5 4 6 TOTAL 100 100 100 100 100 100 100 100 100 100 100 VALUE IN MILLIONS OF U.S. DOLLARS 206.5 209.6 222.9 242.8 212.5 208.6 23h.3 242.6 295.9 308.6 330.9 bY EOGRAPHICAL AREAS EEC 48 48 42 LS 37 33 32 35 30 33 3h U.S.A 11 12 15 16 16 16 16 11 22 19 16 Eastern Bloc 4 9 12 17 15 22 22 22 21 22 2L U.K. 12 12 10 10 11 12 9 11 8 7 8 Others 25 19 21 22 21 17 21 21 19 19 18 TOTAL 100 100 100 100 100 100 100 100 10 100 100 Source: Based on data in Monthly Bulletins of Statistics and StatisticnI Year Books. Table hO REGIONAL DISTRIBUTION OF EXPORTS BY COUNTRIES AND COMMODITY GROUPS, 1965 Percentages Common Market U.S.A. Eastern Bloc Others Commodity Group A B A B A B A B I. Food and Beverages 31.9 35.0 16.2 8.0 3h.8 26.3 36.4 30.7 a) Currants and Sultanas 13.2 34.6 1.9 2.3 11.2 20.3 21.3 42.8 b) Olives and Olive Oil 1.4 13.3 4.3 18.3 7.7 50.0 2.5 18.4 c) Citrus Fruits 1.3 10.7 1.0 3.6 11.7 65.7 3.2 20.0 d) Fresh Fruits 7.5 70.8 1.0 4.2 1.0 6.7 2.5 18.3 II. Tobacco 38.0 38.9 48.9 22.6 32.1 22.6 20.1 15.9 III. Ram Materials and Semi-manufactures 7.0 16.8 11.5 12.4 26.1 43.0 15.2 27.8 a) Raw Cotton 1.3 8.1 0.6 1.6 15.8 67.0 4.9 23.3 b) Hides and Skins 2.5 16.1 8.4 23.9 6.8 29.4 6.3 30.6 IV. Ores and Metals 10.1 46.6 10.3 21.5 4.2 13.4 5.3 18.5 a) Bauxite 2.5 46.8 0.4 3.2 3.2 40.3 0.7 10.0 b) M.agnesite 1.6 31.6 3.3 29.8 0.1 1.8 2.4 36.8 V. Industrial and Handicraft Products 5.8 2h.5 8.0 15.2 2.0 5.9 16.7 54.4 a) Textiles & Yarns 2.5 37.8 1.9 13.5 0.4 4.0 3.8 44.7 VI. Others (incl. NATO supplies) 7.2 48.5 5.1 15.0 0.8 3.6 6.3 32.9 TOTAL 100.0 100.0 100.0 100.0 Amount in $ million 113.8 51.3 78.4 87.4 As %0 of total exports 34.4 15.5 23.7 26.4 A: Commodity exports as a percent of total exports to a country group. B: Commodity exports AS A PERCENT OF ITS TOTAL. Source: Bank of Greece. Table 41 IMPORTS BY GROUPS OF PRODUCTS AND BY GEOGRAPHICAL AREAS On payment basis as percentages 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 I. By Groups of Products: Foodstuffs 24 29 20 16 16 19 18 14 19 17 18 Raw Materials 33 30 26 26 26 26 25 25 23 24 22 Petrolem Products 12 10 13 10 11 10 8 8 7 7 7 Capital goods 11 11 11 18 18 16 18 22 19 22 23 Including machinery (ll) (11) (9) (14) (15) (13) (14) (16) (15) (18) (19) Transport equipment (2) (2) (2) (4) ( 3) ( 3) (4) (6) (4) (4) ( h) Consumer manufacturers 20 20 30 30 29 29 31 31 32 30 30 * Total 100 100 100 100 100 100 100 100 100 100 100 Value in millions of dollars 352.0 440.7 475.1 [91.5 454.8 497.1 561.2 608.1 708.4 831.3 976.3 11. By Geographical Areas: EEC h2 36 40 43 42 40 41 47 42 h0 38 U.S.A. 25 26 19 14 15 17 16 13 17 18 19 Easter Bloc 4 4 6 7 10 12 11 10 9 10 9 Sterling Area 18 16 14 16 14 12 12 12 13 15 14 Others 11 18 21 20 19 19 20 18 19 17 20 Total 100 100 100 100 100 100 100 100 100 100 100 Note: The shares of foodstuffs and capital goods and that of U.S.A. and EEC countries would be higher if we had included the imports under PL h80, 665, 287 and suppliers' credits in the total. *Including 1.4 freight non-allocated. Source: Based on data in Monthly Bulletins of Statistics and Statistical Tearbooks. Table 42 REGIONAL DISTRIBUTION OF IMPORTS BY COUNTRIES AND COMMODITY GROUPS, 1965 (Percentages on payment basis) Common Market U.S.A. Eastern Bloc Others Commodity Group A B A B A B A B Agricultural Products 7.0 26.5 26.2 23.8 14.8 28.5 13.5 43.2 = 100.0 Raw Materials 25.7 13.5 19.2 23.7 44.7 11.9 8.1 35.3 - 100.0 Fuels 1.5 10.9 21.9 6.7 8.1 30.5 29.7 31.7 = 100.0 Capital Goods 28.2 28.5 14.0 17.2 46.4 23.8 5.6 24.2 - 100.0 Manufactured Consumer Goods 36.4 19.8 18.6 26.4 49.5 13.6 6,2 30.7 = 100.0 Freight non-allocated 1.2 0.8 0.1 2.2 36.8 11.8 0.7 50.7 = 100.0 Total 100.0 100.0 100.0 100.0 Amount in $ million 374.7 189.7 91.h 320.5 As a % of total imports 38.4 19.4 9.h 32.8 = 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: Bank of Greece.