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Greek EconomyIn May 2010, Greece experienced its first economic bailout from the International Monetary Fund and the European Union to rebuild the Greek economy. As a result, Greece was given $146 billion in loans. Greece suffered economic frailty, in part from hosting the 2004 Olympic Games, the global economic crisis, and switching to the euro. Then, in August 2018, Greece received its final loan from European creditors. This loan signaled the end of the bailout program that began in 2015. To work toward financial security, Greece has committed to running a budget surplus until 2060 and accepting continued support from the EU.

Despite this financial turmoil, tourism presents a bright light for the Greek economy in increased revenue. Tourists’ interest in Greece began to boom during the 2004 Olympics, held in Athens. Although the Olympics have been cited as the main cause of the economic crisis in Greece, tourist industries in Athens were surveyed and concluded “the Games upgraded the validity of Athens on the international tourist market.” Since the 2004 Olympics, Athens, on average, has lengthier tourist stays than other major urban destinations, such as Paris and Barcelona. Athenian hotels have also become more efficient since the Games. And ticket purchases for historical sites have also seen an incline.

Tourism Helps the Greek Economy

This surge in tourism has sparked a large revenue intake for the Greek economy. In 2018, travel services in Greece reported an intake of 16 billion euros, approximately $18 billion, up 14 million euros since 2017. They attribute this surplus to a 40 percent increase in travel receipts and a 53 percent increase in travel sales. That year, the effect of tourism on Greece’s gross domestic product was an estimated 20.6 percent, reaching $44.6 billion. In fact, this is double the global average of 10.4 percent. This means one out of every five euros spent in Greece stems from travel and tourism.

Greece is happy with how tourism initiatives have been implemented in the past several years. The country also acknowledges 988,000 jobs lie in its tourism and travel industries. In 2019, Greece expects this job market to reach 1 million jobs. As such, travel and tourism is the largest employer in Greece. Minister of Tourism of the Hellenic Republic Elena Kountoura has noted Greece’s plan for the continued growth of the tourism sector: “We intend to maintain Greece’s strong momentum in tourism and maximize its benefits for the local communities across Greece, acknowledging tourism’s immense value as a major driving force for employment, economic and social prosperity.”

The reparation of the Greek economy has developed a dependence on tourism and travel. From the deep blue waters of the Aegean Sea to historical sites such as Delphi, people from all over the world flock to witness a small piece of Greece’s beauty. What they may not realize, however, is they are working to support an economy on the mends. And the positive effect of tourism will continue to increase annually, as Greece works toward financial stability.

Claire Bryan
Photo: Flickr

Why the Crisis in Greece is the United States' Problem - TBP
Because Greece is part of the European Union, its debt crisis may seem like it is only Europe’s problem.

That is not the case.

How the crisis in Greece pans out may in fact shape how the U.S. economy and geopolitics plays out in the next 10 or 20 years. If the United States does not step in to aid Greece, the United States will lose a large percentage of its trade profits from Europe. In addition, a lack of aid from Washington may assist the Sino-Russian alliance in influencing poorer European and Asian countries.

In 2004, U.S. trade exports to Greece reached $52.6 billion. With the economic decline in Greece, the country will be unable to continue to trade with the United States to the same degree. But this is not the only trade that the United States will lose as a result of the debt crisis in Greece.

The dollar is rising against the euro, which is partially a result of the crisis in Greece. While the word “rise” may imply that this is a positive sign, it is in actuality bad news for the U.S. economy. A dollar that is worth too much more against the euro will make U.S. goods more expensive for countries in the European Union. If the goods are too expensive, then many states will either purchase the goods in much lower quantities or will not be able to buy them at all.

Basically, if someone does not help Greece, the United States will lose a lot of money.

The other problem is Sino-Russian in nature. China has been spreading its sphere of influence. One of the ways in which China’s influence is growing is through the use of economic aid, and one of their most significant economic and political allies is Russia. Greece has been becoming increasingly friendly with Russia as a result of its economic difficulties.

According to an article by Yibada, “China has expressed interest in transforming Greece as a European base” for the “Belt and Road” initiative. This could lead China to aid the country.

China is offering Russia, Greece and other countries an alternative to Western aid institutions. As is well known, with money comes influence. If the United States wants to keep its influence over the world and continue to spread democracy, then it needs to continue to aid countries and perhaps even increase this aid.

Politically, China is undermining the sanctions against Russia and could continue to undermine U.S. foreign policy in the future.

If the United States does decide to be a major player in aiding Greece though, our economy will benefit majorly.

Stabilizing Greece will aid in stabilizing the euro, which in turn will at least assist the United States in maintaining its current trade with countries in the European Union. But, in addition, improvement in Greece’s economy will make it possible for Greece to become a more important trading partner for the United States.

It is up to the United States: this matter of aid could either help the United States, or it could damage its economy.

Clare Holtzman

Sources: The Borgen Project, Council on Foreign Relations, Harvard International Review, Mother Jones, U.S. Department of State, Yibada
Photo: Flickr