R E l ve R I CL

Report No. EMA-36a

This report is for official use only by the Bank Group and specifically authorized organizationsor persons. It my not be published, quoted or cited without Bank Group authorization. TheBank Group does not accept responsibility for the accuracy or completeness of the report.

TMTVPMATTCNAT, RANK VOR RECONSTRUITM AND DViPT.ClPMVNT

NTVPKATTC)NAT. )RVFT-OPMlPNT A qCCTATTC)N

CURRENT ECONOMIC POSITION

AND PROSPECTS

OF

GREECE

May 28, 1971

Eurone. Middle East and

North Africa Department

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Currency Equivalents

US $1.0 = 30 Drachmas

Dr. 1.0 = US $0.33

TV%40 j~. 40 IftOgA ^Vq +hda 44,AAr,~fffO

Economic Mission which visited Gretece inV kUJ U 1w OT1 . Ir. -4 .4.t 0n4 nammaJA

the following:

Vinod Dubey Chief of Mission

Muhammad Altaf Hussain Agricultural Economist

Hans-Joachim Lell General Economist

William Allan Agronomist (Consultant)

A. David Taylor Industrial Economist (Consultant)

Page No.

BASIC DATA

SUMMARY AN) CONCLUSIONS ............................... i

I. RECENT ECONOMIC TRENDS AND DEVELOPMENT PLANNING 1

A. Economic Trends and Structure ............. 1B. Development Planning and implementation ... 12C. Regional Development Problems ............. 15

II. ECONOMIC SECTORS ................................. 17

A. Agriculture ... ........ ....... 17B. Industry ........ .............. 26C. Infrastructure ..................... 32

III. MONEY AND FINANCE ............... ... 37

A. Public Finance ............................ .... 37B. Money and Credit .................... .... 42

IV. BALANCE OF PAYMENTS ......... ....... *49

A. Foreign Trade and Invisibles ............... 49B. Capital Movements ......................... 57

V. ECONOMIC PROSPECTS .......... osoooosoo... ...... 61

APPENDIX - Agricultural Supports and Subsidies

STATISTICAL ANNEX

MAP of GREECE

RARTr AT

Arant Tai 1 19 AAnf onlift" Ir4 1me

Cultivated - 40,000 square kilometers

Population (1970): 6.9 millionRoe o1 growtn L>bo-u0): uo.%

Density (per square kilometer): 68

Political Status: Military regime. Member of U.N., NATO, OECD, GATT andassociate member of EEC

r--m M +4o-TDuAln .

Drachmas 252.2 billion(or US$8.4 billion at the exchange4- eJ JJP~ 'Jn="&

Rate of Growth (in real terms) 1960-67 7.6%.L7uu U .81/

1969 7.8%n7n 0 i

±7 I V UOU/0

Per capita GNP at factor cost(1970) approx.Drs.27,OO0(US$900)

Industrial Origin of GDP at CurrentFantor Cost (% share) 160 1966 1969

AerrinivIturm 211.7 2h.0 20.hMining 1.1 1.2 1.4Man-ifnnt.11n-in 17. 16.6 16.

Construction 6.8 6.9 8.5

pe d+1 ahn"% JS All fl JC )"h. c'ny c.WI'r._ 1 -c1.

Public Consumption 11..2 11.9 13.2uGuoss iumsic LAveostI I A.e c; c*Net Export - 5.3 - 5.7 - 6.6

Budge+

Central Government Account 1967 1,68 126 1970 19714t - 14114on A as m%-1LA I WAL.L .. JL LLa1AA

Current Revenue 38.7 U.8 50.4 57.5 63.2Current Expenditure 38.4 42.8 47.7 54.6 59.3Current Surplus 0.3 2.0 2.7 2.9 3*9Capital Expenditures 7.2 9.3 10.8 12.9 14.0Overall Balance - 5.3 - 6.5 - 7.3 - 9.1 - 8.9

increase over Average GrowthMoney and Credit (billion drachmas) 1970 1969 1960- 70

Total money supply S4. 4 11.0% 13.3Time and savings deposits 85.6 25.3% 21.5Commercial bank credit to private 60.3 19.5% 17.1

sector

External Public Debt, Includin 1968 196 1970LUndisbursed US million

Total debt (year end) 618.1 769.6 974.8Total debt service 52.5 59.9 70.0Debt service ratio (% of merchandise 5.2 5.4 5.3

exports, and net invisibles)Average Growth

Balance of Payments (US $ million) 1960 1969 1970 1960-70

Exports of goods 209 530 612 11.4%Imports of goods 520 1434 1705 12.6%Net services & current transfers 208 545 673 12.5%Current account balance -lob - 358 - 419 -

Commodity composition of exports: 1960 1969 1970(percent share)Tobacco 34.7 17*7 16.6Currants and sultanas 11.1 8.1 6.2Raw cotton 9.2 6.7 5.1Manufactures 3.8 TA.q 17.0

Foraign exchange reserves (US 1 million) 196q 19 1970

3cn'17 3410(or 3.0 months' (or 12.7 (or 2.2 months

iaports)

IMF Position (US $ million) 1968 1969 1970

Quota 100 100 138

IBRD Position (US $ million)

Debt outstanding 12.5 12.5 46.3ULLL - .4 L.Januu-L1 ay " ).1. J.0

/a Loans outstanding at the end of 1969 plus major reported additions inlQ7 - ILLLbVJkylIL .11 nYI V

SUMMARY AND CONCLUSION

1Rapid no mic g rnth aina the m1d-95(1's has been nmnni Pd

by significant structural changes. The share of industry and services inDP and employment has increased and that of agriculture has declined The

ratio of investment to GDP has increased significantly and its compositionhan 4- - - -,4f-ih n am1 1l a yr i.n,-

4-% q^r

4 n" intri rva Pctnt-. fn'ioc t- -

saving has also increased, reflecting a high marginal saving rate, and theproportion of domesticInetet nn A ,4 reorshar-mained stable over the last fifteen years. The average growth of output perworke ha been high5 bCL 1&ut h as been- accomp&hLan4eAC SJy aL relt -.L - -1--~Y ~Wof employment. Net emigration abroad, averaging about 50,000 per year inthet lasCt dec-tade basC, hoLwe-ver)., preC.vente Lthe worsfnin ofLBti tJA e unempLL.jS.,loyment

situation.

2. A recession in 1966 and 1967 was intensified by political uncer-LW±LLLLACD dLHU IlldLACU U LCUUILAURSLL PVELC XL&VCIZLLIMILL9 VCLC .a .Lbdinflows and receipts from tourism and workers abroad. Since the second

.1 1700 ho .1=-L;V111y L LU?L 6 L.uitL. 0 I o, Ioever, tne econumy nas resumeu dap)u gLowLn. G NP tonstantprices increased at about 8 percent in 1969 and in 1970, in line with thetarget of the 1968-1972 Plan. A similar rate of growth is projected for1971. The expansion has been stimulated by growth of investment (averaging15 percent per year during 1968-1970), exports and invisiDle earnings (tourism,shipping and workers remittances). Two good agricultural years have helpedthe expansion. There are signs that the growth of private consumption isaccelerating, the increase in 1970 being 7 percent, as compared to 6 percentin the preceding year and 5 percent in 1968.

3. The expansion of industrial activity na3 led to shortages orskilled labor. However, the general labor situation is easy and there hasbeen little pressure on wages. this position could continue because ofthe surplus labor in agriculture, and the existence of some slack even inthe non-agricultural labor force. An expansion ot training tacilities is,however, required to meet the needs of skilled labor and to facilitate theabsorption of the reserves of labor by the sectors of expanding labordemand.

4. Although prices of selected commodities came under pressure in1970, in general rapid economic growth has been achieved with relativeprice stability. Consumer prices were virtually unchanged in 1968 andincreased by 2.4 percent in 1969 and 3.7 percent in 1970. The slightlyhigher rate of increase in 1970 reflects partly the rise in import prices.The stability of wage costs and prices in an environment of inflation inmost industrial European countries and the USA has helped to improve theinternational competitiveness of Greek industry.

5. There were no significant changes in government taxation but amajor inprovement in tax collection. Tax revenues have increased at anaverage rate of 14 percent during 1968-1970, and current expenditures at

12 5 percentL per yea . % . ~ L) JA ~ 1. L LII L LkL L. I-V~ LJ~1

have increased. However, public investment expenditures have also risen-ily, th 4t..J - J -- -- 2... 1L_ 11 -- - - - inc -- AA in. __

rapiu.y, Lue _LLVetm!1tLL. UUUg. LuL.LUZ5.1%a Uy It pcLLLIl "I 7U7 aLU 17 PVL-cent in 1970. Consequently the overall budget deficit has become larger,out it nas Deen LnanceU relatively easily vy UUmestic unu exteral. vorrow-ing. Treasury bills have been the most important single source of budgetfinancing meeting 40 percent o tne overall budget defici in L 7m. Iueincrease in the public investment program has been accompanied by some im-provement in project preparation and implementation. However, there ismuch scope for improving administrative efficiency and coordination to makegovernment investment spending more effective.

6. Monetary policy was used to stimulate demand during the recession.Since 1969, however, there has been a gradual shift to a more restrictivepolicy, with the bank rate being increased and the proportion or privatesight and savings deposits of banks required to be held in government paperbeing raised. Selective credit controls and a system or interest rate ceil-ings and reserve requirements differentiated by the sectors to which creditis advanced, have been used to shift bank lending away from low prioritysectors e.g. domestic and import trade, to high priority sectors, e.g.export-oriented industry and handicrafts. A very rapid increase in privatesavings deposits during 1968-1970 (average growth rate 26 percent) reflects,to some extent, increasing public confidence in economic prospects.

I. Agriculture still accounts for 19 percent of GDP and 3 percentof total export earnings. The measures adopted under the Plan have tendedto reduce structural, organizational and financial obstacles to development.Irrigation has been the chief means of promoting rapid agricultural growthas it enables simultaneous diversification of crops, yield improvement anda change of farm structure -- consolidation is compulsory in irrigatedareas. Agricultural subsidies and supports have been used for influencingagricultural production and their cost increased rapidly to Dr. 4.7billion in 1967. The system of subsidization has been revised, incomesupport measures being increasingly used instead of price support. As aresult the cost of subsidies has declined to an expected Drs. 2.2 billionin 1971. Production of traditional commodities has increased more slowlywhilst that of dynamic products such as fruits and vegetables has expandedrapidly. The output of pork and poultry meat has increased rapidly buttraditional beef production has stagnated because the lack of an integratedlivestock policy. The support incentives are inadequate; there is no organ-ization to extend effective measures to remote areas, and meat import poli-cies are unfavorable.

8. Indutrin] output haf increased by about 10 percent per yeardurtng 1908-1970, slightly lower than the rate envisaged in the present

Dovotopient Plan. Although manufacturing production is predominantly direct-

ed towards the domestic market, an increasing number of manufacturers are nowaware of the need for improved efficiency and the exploration of export oppor-

tunities. The duty free access to EEC markets provided by the Treaty of Athens

is a maior factor in the change in the orientation of industry. The share of

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manuracturea gooas increasea trom 5 percent or Lotal exports in iovo tonearly 37 percent in 1970. However, industrial exports are relativelynarrowly based -- base metals (aluminum, nickel), textiles (cotton yarn),and chemicals provided more than three fourths of the increase in exportsof manufacture in the 196 0 's.

9. The balance of payments situation remains a source of difficulty.Exports of goods cover only one-third of imports, about 40 percent beingfinanced by invisibles and the rest by capital intlows. Exports have in-creased rapidly - 14 percent in 1969 and 15 percent in, 1970. Gross receiptsfrom invisibles increased by nearly 20 percent in 1970 as compared to 9percent in 1969, reflecting bouyant tourism, shipping and workers remittances.However, imports increased by 15 percent in 1969 and 19 percent in 1970,with imports of investment goods and raw materials increasing more rapidlythan consumption goods imports. Consequently, the deficit in the currentaccount of the balance of payments increased to US$419 million in 1970,compared with US$358 million in 1969 and US$260 million in 1968. In spiteof increasing net capital inflows, the official reserves declined slightlyto US$310 million in 1970. Reserves at present are equivalent to only twomonths import as compared to three months in 1965/67. The growing balanceof payment deficit has resulted in substantial public external borrowing,mainly fairly expensive short and medium-term loans from US and Europeancommercial banks. Due to political reasons, Greece has had reduced accessto long-term concessionary loans in recent years. The EEC did not renewthe capital aid agreement of 1962 and, like the dormant Greece OECD Consor-tium, the European Investment Bank stopped lending the uncontracted amount(US$55 million) of the US$125 million originally committed for aid for1963-67.

10. The prospects for continued economic growth in the next years arefavorable given domestic stability and provided savings and export perfor-mance are good, administrative efficiency is increased and excessive relianceon short and medium-term borrowing is avoided. The emergence of dynamicGreek enterprise, price stability, the high levels of private investmentand its shift away from dwellings, and the free access to the EEC marketwhile the domestic market is fairly protected, are important factors favor-able to growth. However, for sustained development in the long run, greateremphasis needs to be placed on institutional and administrative reforms andon education and vocational training. The growing balance of paymentsdeficit could have a restrictive effect on economic growth during the nextfew years if the ratio of domestic saving to GDP does not increase or ifsufficient inflows of long-term capital to the private and the public sectordo not materialize. The current account deficit is officially projected tostabilize at around US$600 million in 1974. The Rross public capital inflowis projected to average around US$300 million during 1971-77 and the debtservice ratio which was over 5 percent in 1970 is risina and could reacharound 15 percent by 1977.

I. RECENT ECONOMIC TRENDS AND DEVELOPMENT PANNING

A. Economic Trends and Structure

1.1 Greece has an area of 132,000 square kilometers of which only40 nercent is below 200 meters in altitude. and nearly 20 percent is ac-

counted for by about 170 inhabited islands. About 30 percent of the landarea in cultivated, the rest being pastures (40 percent), forests (19 per-

cent), or unproductive. The total population is about 8.9 million, nearlyhalf mf it livinr in urban area. The three cities of Athens. Thessaloniki

and Patras alone account for about 30 percent of the population. The GNPner cnita ia ahmit US$900 htit therp are lnrap raewIn.al diffPrPnen in

standards of living.

1.2 A military regime displaced the previous parliamentary govern-ment in Anvil 19A7 and in ArtnhAr 19AR a new ennariturinn was rntified hv

referendum retaining monarchy and parliament in modified form. The royalfamiliy hn hatararr hogn in unltinta-xT av41 in Unma aine-a Y)PO-ambhr 1967

following an abortive counter coup by the King and his functions are per-formed by a regent. Martial laur coantinues to be enforce though, theregime claims, with less severity than before. No parliamentary electionshave. beenar schdle nd cr-a-ino.. cnst-tuiWm' provisiot-..Ans, an civil rigahts

are in abeyance. A nominated Legislation Advisory Committee was estab-lished last ut thsn 1 n . ~.n, There is Sill1

reluctance in many foreign countries to establish close relations with the=eL l CIA- LL.LM LVLCIO.LALy CLL

development.

1.3 The economic policy of successive governments has been based onLHe pLUiULtLUn UL pLiaVaLC =&LLCLPL.MC W.LL.L L. O6aLc FL%V.LULr, OU%IaL C L-

vices and basic infrastructure and an institutional and policy frameworkUesigned to secure a favoraue busness climate. liue Snare OLvltn pUUDIC

sector in total fixed investment averaged about 26 percent during 1955-69.t.see tnnex table 2.6 U ue preseu Government has uraWn11 up a riVU-LUr

Development Plan for 1968-72 with indicative targets for both the privateaHu 11e PULLt OCULUL.

fopu,ation and Employment

I. ine populatIon growLi rate Has avUrageU about 0.0 percent peryear during the last two decades. The growth rate has fluctuated fromyear to year depending on net emigration, wnich nas averaged aDOUL 5U,UUU ayear during the 1960's. During the same period the economically activepopulation, (which constituted 44 percent or the total In 1969) has in-creased by an average of 25,000 a year or at about the same percentage rateas total population. Assuming that 50 percent or the emigrants were work-ers, 1/ emigration was equivalent to about half of the potential increase

1_/ During 1966-69, 49 percent of the emigrants were classified as workers.See Annex table 1.4.

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in the economically active population during 1961-69. The populationand labor force are projected to grow at the trend rate of about 0.8percent per year in the next few years. Despite the relatively slow growthof total labor supply there is a large surplus of labor in agriculturewhich since 1961 has been gradually moving into non-agricultural employmentin Greece or abroad. There is, however, a shortage of skilled labor.

1.5 The rate of growth of total employment in the 1960's has beenmuch slower than in the 1950's largely because of an absolute decline in

the employment in agriculture. (Table 1) There was a distinct contrastbetween the trends in the structure of employment during the 1950's and19 60's. During 1951-61 the proportion of the economically active popula-tion in agriculture increased, with the proportion in services decliningand that in industry remaining unchanged. Since 1961, there has been adecline in the absolute numbers engaged in agriculture while employment inservices and industry has increased more rapidly than the total activepopulation. However, the total increase of non-agricultural employmentduring 1961-69 was 338,000 as compared to a total net emigration during thesame period of 400,000, mainly from rural areas. In a sense, emigrationabroad has been a "safety valve" that has, among other things, helped easethe employment problem. (see para. 4.24 and Annex tables 1.5 and 1.6).

Table 1: STRUCTURE AND GROWTH OF EMPLOYMENT

(in percent)

Growth RateStructure per annum

1951 1961 19 6 9 --- 1951-61 1961-69

Agriculture 48.2 53.9 47.9 3.6 -0.7Industry of which /b 19.4 19.2 21.1 2.3 1.9

Mining and Manufacturing 16.3 14.0 14.5 1.0 1.1Services 32.5 26.9 31.0 0.6 2o

Total 100.0 100.0 100.0 2.5 0.8'

/a Estimates/b Mining, manufacturing, public utilities and construction.Source: Population censuses for 1951 and 1961, and estimates by the

N.S.S.G. for 1969.

Output

1.6 The average rate of growth of output has been quite high during.

the last decade, GDP at constant prices having increased at about 7 per-

cent per year since 1960. (Tables 2 and 3 and Chart 1) Following a reces-

sion in 1966, significantly worsened by political uncertainties in 1967,

Table 2: TSE AND SUPPLY OF RESOUM'ES

Pecmag cane n cnsan pics/a FiLve Year mPercentage ratio ofPercentage change in constant prices -Targets -- GDP in current prices

1960-1970 1960-1965 1965-1970 1968 1969 1970 1968-.1972 1960 1965 1967

Ca=nsuptial 6.7 7.7 5.8 5.0 6.3 7.1 7.9 88.3 85.6 82.0

- private 6.9 7.9 5.9 6.1 5.9 7.2 8.1 86.3 73.8 68.5- public 5.6 5.7 5.4 -3.1 9.9 5.5 6.3 11.3 11.8 13.4

Gross D~esticInvetent /c 11.3 15.3 7.5 18.4 16.7 7.3 9.9 18.9 25.3 26.7

Fi~d Investæent /c 11.0 11.4 10.7 19.3 19.1 6.9 9.9 19.2 22.3 26.7

- private 11.5 22.8 10.2 25.2 19.6 4.7 8.5 12.8 16.1 19.2- public 10.1 8.h 12.0 7.0 17.8 12.4 13.1 6.3 6.2 7.5

Gross DmerticSaving /d 11.3 10.1 12.5 15.3 15.1 12.6 10.8 13.6 16.5 20.0

Fareign Balance /e 11.7 2,5.5 -0.8 25.0 20.1 2.4 6.9 5.3 9.6 6.8

OP at market prIces 7.4 8.0 6.9 6.6 7.8 8.0 8.4

G.DP at market prices 7. 8.0 6.9 6.4 8.0 8.2 7.5-8.5 10 100 100

Exports 114 9.6 13.1 2.7 14.1 15.4 10.8 6.o 5.7 6.4

Lports 12.6 14.6 10.6 7.5 14.8 39 9.7 151 17.9 17.±

Invisibles, net 12.5 14.7 10.3 10.4 4.0 23.5 12.3 6.o 7.1 6.6

Longterm capital in flow . - 7.7 8.7 24.4 16.3 3.6 3.2

- p ic . • 17.5 24.3 37.9 2.6 1. 0 1.5- private 3.1 . 14.9 28.0 -- - 2.7 1.7

Total capital, net 9.5 46.6 19.1 17.3 2.3 4.3 4.1

Ai 1958 prices71 At 1967 prices7- Excluding invasiments in ships7i Derived as difference between GIP and consumption7e Net borrowing and net transfer from abroad, excluding investnents in ships

Saurce: NatidnaL Statistical Service and Bank of Greece.

and marked by reductions in private investment, capital imports, receiptsLau ouxxsuand from workers avbro- ae Greek econuvmy ha ontinzueudc its

vigorous expansion. GNP at constant prices grew by about 8 percent in

expora ts r cosupto an sinvestmenoth and by good havst.Asiiarhg* 'J ~ ,iUt -*..~ w a a aU 5.a J f U a Ua J.Lff 191 t 0 L..1JV. L CU UJy L L Ca .L9

exports, consumption and investment and by good harvests. A similar high

of an annual average of 8.4 percent might be achieved.

Table 3: GROWTH OF GDP BY INDUSTRY OF ORIGIN

/a r.ev-aar rauPercentage growth rate in constant price- Target

A /C1960-1970 1960-1965 1965-1970 1968 1969 19 704b 1968-1972--

Agriculture,Forestry,Fishing 3.8 5.9 2.1 -7.7 5.0 8.0 5.2

/dIndustry-- 8.8 8.9 8.5 11.3 11.0 7.9 11.4-Manufacturing 0.1 0.4 . I.4 t.Z I.U 11.4

-Construction 9.4 9.4 9.3 20.1 13.7 5.2 10.0

Service./e 6.9 7.1 6.7 6.7 7.3 7.4 7.4

GDP at factor cost 6.8 7.2 6.3 4.8 8.0 7.7 8.0

Tn 19rA r4cea

7 Preliminary1/ A+- 10a7 -- 4^p.

7T Mining, manufacturing, electricity, gas, water, constructionJ7 Ti tn' aet4.,a commnitinenn trna hank4t.. haan heal fh

education, etc.Source: Natioan--!CSttiatical Serrvice.

1.7 'The sneoal compos4tion of rniD i- hwa 4m44n , h

share of agriculture in GDP at factor cost has declined sharply betweenanCd 5T .1Vf.-UT,KOWehlle n amw-at ofLe&I.e as risen and of mining samaJufaI tU *sU UJ. W44AAt LUUWL VA DaLVAL.O E LDLI GLUU rmA coLAstant a(lu

manufacturing has remained constant. (Table 4)

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C卜「！仔，

- 6 -

Table 4: SECTORAL COMPOSITION OF GDP

(in percent)

Share of GDP at Factor CostCurrent Prices 1958 Prices

1955-57 1967-69 1955-5/ 1967-by IIU

Agriculture 30.4 21.6 30.0 20.3 19.2Industry La of which 23.0 27.3 22.5 30.8 32.0Mining & Manufacturing 17.2 17.5 16.5 20.2 ZO./

Services 46.6 51.1 47.5 48.8 48.8

GDP at factor cost 100.0 100.0 100.0 100.0 100.0

7a Mining, manufacturing, construction and public utilities.Souce:Natinnal Arrm1intc nivi.iinn- N_q_q_r._

Productiviy

1.8 The bulk of th grow~ t,I n einit- 4" tho 1!2f ".^ d~and= has da-

rived from increase in the output per worker. The growth of product perworker in the, I60lg has acceleated 4n comarI4on .*4th the 1Q950'a largelybecause of a more rapid increase in output per person employed in agricul-

culture reflects partly the reduction in underemployment following the

1960's. However, the growth or productivity in agriculture continued to

in agriculture was only 40 percent of the average in the economy in 1969.

Table 5: INDEX AND GROWTH OF OUTPUT PER WORKERS BY SECTORS --

Growth RateIndex (in percent)

1951 1961 1969 1951-61 1961-69

Agriculture 63 51 40 0.9 2.2Industry of which /b 99 135 152 6.2 7.0

Mining & Manufacturing 87 127 143 7.0 7.0

Services 156 173 157 4.1 4.2

Average 100 100 100 3.0 5.4

/a Value added by the sector divided by employment in the sectorexpressed as an index of GDP per employed person.

/b Mining, manufacturing, public utilities and construction.

Source: Estimates based on N.S.S.G. data.

-7-

Investment

1.9 The ratio of gross fixed investment to GDP increased from 19 per-cent in 1960 to 27 percent in 1970. (Table 2) Though investment in 1970increased only by 7 percent the average growth rate during the last threeyears averaged 15 percent as compared to the Five-Year Plan target of 10percent. 'In 1971 investment is expected to increase by about 14 percent.

1.10 The structure of investment has also changed with a decline in theshare of dwellings and an increase in the share of industry and economic in-frastructure like Power and transport. (Table 6) This Points to a aradualshift away from real estate as a form of holding private savings. Thechanze in the composition of investment would have been more marked but forthe fact that housing and other construction was encouraged in 1968 and 1969in order to get the economy out of a recession. 1/ In 1970. the share ofmachinery and equipment in gross fixed investment was about 32 percent.

Table 6: STRUCTURE OF INVESTMENT /a

(in percent)

1955-57 1960-62 1967-69 1970

A. Gross Fixed Investmentby Sectors 100.0 100.0 100.0 100.0

Aar1culture 10 5 15.5 17-7 11.1

Mining & Manufacturing 12.9 10.9 11.3 12.0Power & Transport 21JL 957 30A 79 AL

Dwellings 40.9 32.2 30.5 27.23ther Services A ' 15 .7 15 . 18 .

B. Gross Fixed Investmentby type of Asset 100.0 100.0 100.0 100.0

Dwellg 40.9 32i2 30.5 i -1 20;-Other Construction 31.9 41.3 40.3 40.8EnIment 2 7 2 65 29. 3 2.

/a Annual averages: at 1958 prices; excluding investment in ships.Source: Natial Acu t4 Div

4iio, N..SC

1/ Investment in housing, which increased by 31 percent and 19 percentJ_ ~ in4o A Ilo- -- - .1 A_1j_...A 1- 0 j. 'I Q07

nLL 1 7UU au I i)myc.L±veJY, u y U PtJuL%tULLL in 17I. U

the other hand, fixed investment in manufacturing and mining increasedVY 18 pe[cent in I!9,11J. Se Annext~ table 2.11 , L.j, ILad.4

-8-

rapid increase in investment and the share of foreign resources in the fin-ance o ULnvestment hLas remained relatively stUable. k(able u 7) 1: mrLg1al

savings rate while fluctuating has tended to be high averaging over 30 per-cent uring 19u-6o. Uoss domestic saving increased by 13 percent in 17Ucompared with 15 percent in 1969 and in 1968 and was about 20 percent ofGDP. (Table 2) The saV1g5 of householu have increased from 9 percent ordisposable income to nearly 14 percent in 1968 and public savings have alsorisen significantly. ksee Annex Table 2.15)

Table 7: THE FINANCE OF INVESTMENT /a

Billion Drachmas Percent1955-59 1960-64 1965-69 1955-59 1960-64 1965-69

Gross domesticinvestment 14.9 28.3 51.3 100.0 100.0 100.0

Domestic finance 10.5 20.6 38.4 70 73 73

Forplan Finance 4.4 7.7 13.9 30 27 27

/a Current prices, annual averages; excluding ships.

Source: National Accounts Division, N.S.S.G.

Prices

1.12 Although prices of selected commodities came under pressure in1970 the r4 aa in tho aneral nrice leval hn hen nito mndaav in r

years. The wholesale price index increased by 2.1 percent in 1969 and 1.5percent in 1970 1.Ith the hilhoar inrrancaa in fin4ahar annlA nA in fiala

The consumer price index rose by 2.4 percent in 1969 and 3.7 percent in 1970,the ~ ~ -_ --cler.Io partl relctn hIhrIpr rcs However, the con-

sumer price index might not reflect the full extent of recent price in-creaSes. *The authorItIe-4 s are awar e tttoMaItain InternatIonal compet"i-tiveness, monetary and fiscal policy have to concentrate on maintainingmfn/ . ..~L Ga LaJ14...romounetary stanuility.

I.au Tue ratio uL iporo 1ULLb gouu5 ULU LLULI acLUor brvices to .ur nasincreased to about 20 percent, whereas the ratio of exports of goods andservices in k-r is Stil arounu 11 percent. Imports of goods have tended toIncrease more rapidly than exports of goods. (Tables 2 and 8) Thus exportat-ings in 1065-69 were sufficient to finance only about one-third of total

importtj of goodt ui compared to about half in the latter part of the 1950's

- 9 -

Orek - T1-. ,.~, Agxf4,4t 4 th me-1-ndise ac-cun was met n 'V1

invisibles (tourism, shipping and workers' remittances) and partly by capital

cessionary assistance and in the 1960's more and more of private capital1.1111L)Wb alt'~JU .1 LI & U11Z on oniei a.L L L Lermo.if

Table 8: EXPORTS AND IMPORTS La

I~7JJ, IDVO4 I1OJ O0

Goods and Non factor Services /b

Imports as percent of GDP 17.1 17.7 19.6Exports as percent of DP 12.1 11.6 12.3Exports as percent of Imports 72 66 63

Goods

Imports as percent of GDP 15.5 15.8 17.4Exports as percent of GD 7.7 6.0 6.3Exports as percent of Imports 50 38 36

/a Current prices, annual averagesTb Excluding workers' remittances and interest payments.

Source: Bank of Greece

1.14 The economic recovery from the recession of 1966-67 has been ac-companied by the growth of the balance of payments deficit on current ac-count to about US$419 million in 1970 compared with US$358 million in 1969and US$260 million in 1968. In spite of increase in net capital inflows,the official reserves deteriorated slightly, reaching US$310 million com-pared with US$317 million in 1969. These reserves at present cover onlyabout 2 months of the import bill as compared to 3 months in 1965-67.

1.15 Even though the long-term capital inflow to the private sectorhas recovered since 1967 and in 1970 was about 28 percent higher than in1969, and despite increasing short and medium term liabilities, 1/ the grow-ing balance of payments gap has resulted in substantial public externalborrowing, mainly medium-term loans from US and European commercial banks.(see Annex table 3.3) Consequently, Greece's total medium and long-termexternal public debt (including undisbursed) rose from US$536 million in

1/ The outstanding suppliers' credits amounted to US$517 million in 1970,

- 10 -

1Q6 to ITCA77( mi114-n 4n 10AQ anne lTqQ7; mi11inn at tho ond nf 1970 (Fap

Annex table 4.1). The structure of external debt is poor largely because ofharrn.4ng n. unfw.0rnble re-a A-rn- rho l-at thre. vnvac roatina frnm

the stopping of new commitments of official concessionary capital causedb- --litical f-eao. The unforanieslo tor-1- of rehr Qr fa 1oflVoroAdCI noqrtly

in the increase of the external public service ratio to over 5 percent.I'

1/ Perrentage of dbht Rervice nayments, computed by IBRD, to exports of

goods and net invisibles, including workers' remittances. The Bankof Geen balance of nnyments data indicate a debt service ratio of

7 percent in 1969 and 9 percent in 1970, reflecting increase 'in ser-v.ice paymet du ton commecial horrowine and rnntrqr-torls loans.vJA.. jJ7AyI-- -- - - - - -- o---- - - -- _

However, the balance of payments data also include dividends andinteret paymens -fot dohat nnd the renmnayetR of external

borrowing by the Bank of Greece. For details of external capital

CHART 11

GROWTH RATES:EXPORTS,IMPORTSAND GDPAT CURRENT PRICES

<1~ ~ ~ ~ , T**.i i l *..i i

-5

1956 57 58 59 60 61 62 63 64 65 66 67 68 69 70YEAR:S

- --- -- EXPORTS OF GCOODS AND NON FACTOR SERVICES----------. IMPORTS OF GOODS AND NON FACTOR SERVICES

- ---- D AT CURRENT PRICES

BD -5 71 8 (

- 12 -

B. Development D1-ann4n and Tmpimen+at4o

1.16 The Economic Development Plan for 1968-1972 is described "as asystem of diectiva anu puLcy msuresou aimeu a prouuUciu a LavLablebusiness climate and securing the necessary administrative, organizational

objective "to modernize the economy". 1/ The Plan targets are "indicative"&jALA ± VOL. O-t VL uL l ' MAULY I Or MOUL OL L1If puViLL 6: LUL . Is

document lists 316 policy measures and institutional reforms which are con-SuAue necesosay "to enuue effective Iusplceentation ansu CVAuw uI, u. +-I,a i A U L . D U L& U 4I ~L . ~ I. 6ILL GLJL IIU A.4u .L U WAI .Il

Plan. Of these nearly half are expected to require either new legislation or* A-voaUll W.L C m A u. .L IJ ± gA.a u .O L.L II t &%A IIIVoL UL L11%. LLa 2UL 1 LunA L L LCa v 9LL.,a

and actions. The whole program of action is ambitious and difficult and prog-.L1o LLa -% unp ea ucLII _A.a L a vU c a J.uw . AtLy ovu UA. 1-Is pLLAJupV U tul A.y

changes have occurred. In mo t cases, however, matters are still under studyor hav e ta was be L a en l up. 21 qt.- -1l-4-. 1.-1, -C .f. 4- 1.-41A4__..01 *.~ sve 3,k ou vU l ~CanoS up. L s A Mac v a.V1ut mu.Cfo In .A4 y up a

suitable institutional framework and an effective administration is incontrast with the success in meeting the "indicative" growth and investmenttargets. However, the government realizes that institutional changes arenecessary if rapid growth and structural change is to continue without

interruption.

1.17 The Plan emphasizes the importance of efficient administrationfor bringing about the policy and institutional reformS and ensuring theeffective operation of a free market economy. Administrative reform isconsidered a "fundamental condition" for attaining plan objectives. So farthe progress in attaining administrative efficiency is relatively smalldespite efforts at reorganization and reform. The four major weaknessesidentified in the Plan --- excessive centralization of decision-making,extensive duplication of responsibilities, obsolete procedures and redtape, and serious lack of trained personnel -- still characterize much ofGreek administration.

1.18 The authorities are aware that tie lack of skilled manpower inadministration has hindered the implementation of the economic programsand institutional reforms. Particularly the regional services which shouldsupervise a. speedy implementation and decentralize the decision-making pro-cess, are often pootly organized and staffed. In order to improve thecivil service, the Plan envisaged a changed system of selecting civil serv-ants and of assessing performance for placement and promotion, but so farnot much has been achieved. It also called for the entablishment of sys-tematic practical training programs and professional education seminarswithin every ministry. Despite improvements in administrative training,it is doubtful if the shortage of qualified people particularly amongstjunior staff, can be overcome in the near future. More facilities for.0mintstrative training at sub-professional levels seam to be necessary.

fT 1'conom1c Devepment Plan for Greece, 1968-1972, p. 8,

- 13 -

1.19 The planned investments of the public sector, totalling aboutDrs. 106 billion during 1968-72, are twice as high as in the preceedingfive-year period. (see Annex table 2.9) They provide mostly for the im-provement of the infrastructure such as power, highways, industrial zones,tourist zones, education and health services.

1.20 The Public Investment Program of the central government, totalingDrs. 61 billion during 1968-72, 1/ consists of a list of projects with anannual implementation schedule through 1972. The annual program is coordi-nated with the government's investment budget. The prcogram emphasizestransportation, (26 percent of total), agriculture (20 percent) and educa-tion (10 percent). (see Annex table 2.10)

1.21 The programs of the public enterprises and local agencies putgreat emphasis not only on investment in power and telecommunication butalso on local roads. (see Annex tables 2.8 and 2.14) In spite of the impor-tance of the investments by public enterprises in power (about 26 percent oftotal public sector investment) and in communication (about 11 percent oftotal public investment) these investments are not directly linked with thecentral government's investment budget.

1.22 The Develonment Plan recognized that the general weaknesses of the

public investment program in the past were weak project preparation and theinitiation of ton many and completion of too few roierts. As a result the

rate of implementation of projects was often slow and benefits from invest-ments were rPnl4?P only qfter murh dely. Prniet-, were considered in iso-lation and without sufficient attention to interconnections among projects.The derln-ard n1%rtixP of the nresent Plan wnq to intpgrate the allocationpattern and the priorities of the public investment budget with the develop-me'nt pnnn Pv-^apt pirmnpartIo was tn o bennvn-P1 'K,y PmnhnQi7_invg np-investment studies and creating an organizational framework for technicaland economic surveys. Projects were to be 4nlg montd mnrp Pffie-iAnflv bVconcentrating efforts on projects with high priority, by emphasizing packagesof internnnected nrnipta inqtned nf i.nlate ant unennneted one.. and

by reorganizing agencies responsible for carrying out public works andscurin- oArdinatinn hetwn them Nu, prn4ecta weve to he t-lken lln% only

if they were considered necessary for long-term development. Decentraliza-

offices of the Ministry of Coordination were to allocate 15 percent of the

1/ The total cost of projects included in the Investment Program isestimated at Drs. 113 billion, of which Drs. 27 billion was spentup to end of 1967 and Drs. 25 billion will be 13pent after 1972 i.e.outside the Plan period.

- 14 -

1.23 Judging by the results of the last three years, the attempt to

This is partly because despite reorganization in ministries and publicagencico auministrative inefiLLLCLILy pt alu LpICrit Can0 tLhie LI UL. o

improvement. The total expenditure on the program is on target. (see AnnexLtUalC le2. 10) Te sCLLUL UL LLUULUi, hUWCVeL ,D Uis d IC L LLt 'illC a

ned one, with expenditure on transport and agriculture being higher andexpenituue on social infrastructure Lower Lan plianneu, JcLun r 11a 4- us-

tions on the capacity to implement projects in this sector. The proportion

of iuvestmeL on local projects has been aoout 15 percent as prograniu-eu

but there is some doubt whether the actual investment decisions regardingthese are really decentralized.

1.24 The extent to which public investment has concentrated on selec-ted high priority projects is not clear. The number of projects under con-

struction declined little in the last three years and, despite a rapid

increase in total expenditure, the number of completed projects was rela-

tively stable, except in transportation where completed projects increased

in number. 11 However, the expenditure per project has increased substantiallyand this could imply a rise in the number of completed projects in the

future. This may be particularly true as the additional expenditure re-

quired for completing projects in hand are, in general, relatively small.

(see Annex tables 2.12 and 2.13) The increasing expenditures also indicate

costs higher than originally estimated. The delay in the implementation

of industrial estates is an example of poor project preparation and execution.

(see para. 1.29)

1.25 The lack of coordination among agencies responsible for public

works is particularly seen in some agricultural projects, in the substantial

time gap between the completion of the main irrigation work and the imple-

mentation of the distribution system by the Ministry of Public Works andthe extension and consolidation services by the Ministry of Agriculture.

(see para. 2.7, 2.8 and 2.14 to 2.22)

1.26 It should be pointed out, however, that the present situation is

an improvement over the past. The authorities are aware of the need to

continue concentrating on even fewer high priority projects, and not taking

up new projects before the ongoing ones are completed. For example, with

the exception of the Egnatia highway project which was not foreseen in thePlan but which is said to be a long-term undertaking to develop NorthernGreece, no new highway project has been taken up in the last two years.However, strong regional pressures still tend to lead to the spreading of

effort on too many projects, and in turn results in delays due to scarcity

of resources.

1/ An analysis of the implementation of the 20 largest irrigation and high-way proe t shw thatC IUO IO at L e end5 of1 107( on'IS. Ily .1 455 .. 5LL1 .14

highway projects were more than 75 percent implemented and 4 irrigation

ul i usighway projects were Less thcan 4- PcLLtL cUM.LULUU. LIe nItp±e-mentation of all public work projects in irrigation and highways averaged

anouL 0 percenc (see Annex table 2.. 1.

- 15 -

C. Regional Development Problems

1.27 There are large regional inequalities in the level of income inGreece despite long standing efforts to redistribute income and to disperseinvestment. GDP per capita in the Greater Athens area. in 1965 was about50 percent higher than in the next most prosperous region, and more than

twice that in the island of Crete. (see Annex table 1,11) This has led tointernal migration towards the richer regions. During the 1960's the rate

of population increase in the Athens region was more than three times thenational average, with the inhabitants of the Peloponnese and the islandsactually diminishing in number (see Annex table 1.10), There is a tendencyfor regional differences to increase. In 1968, the declared family incomein Greater Athens was about 59 percent higher than in the rest of Greececompared with 56 percent in 1965 and 53 percent in 1961. In 1968, the GreaterAthens area accounted for nearly 53 percent of all large scale establishmentsin manufacturing compared to 49 percent in 1958. They 5ovided 58 percent ofindustrial employment, compared to 54 percent in 1958 _1 Over 40 percent of

total electricity is consumed in Greater Athens. The value added of theindustries in the Athens area accounted for about 57 -ercent of total

industrial production excluding the value added of the small scale manu-facturine establishments.

1.28 Resional noliev has for lone consisted of (a) agricultural priceand income support programs, which benefit the less developed regionsrAlativPlv more hernie of their cr nter denPndPnce on agriruItur. and

(b) an elaborate system of tax and tariff concessions which favor industrialInvestment nutide the rrpater Athenq aren There has been a orowing re-

cognition of the limited effectiveness of this approach and regional devel-onment nlitv ha hiin to he more nrafully foeard nn nnlaihilitiec of

economic growth. Recently the country's seven "planning regions" have beenrestruc,.tured and the Services~p fo-r Crd~i4nation of~ Re,poni 1 npiyi,nmnant y-ro

organized. Further, the branch areas of ministries are now to correspondto 'kn1inAnV400 nf t ha "pnlan nn rein"Tn spItec of de cet-ntralIatIo bengone of the main objectives of the administrative reform stressed by thePlan the dariainn-making nrnrena Ja henvily Atntrated at the center.

Only recently regional offices were given an active part in defining localneeda, In determ4nIng local oiect prIorItIes and In ealatIng alternatIve

possibilities. (See para. 2.22)

1.29 The intention to "decentralize" industrial activities away fromA thens and to. cncennntratee de~veopament at the same 1-4ae in some -f4 the less

developed regions is reflected in the plan to establish five industrialetates w.hic.h .~41 io F4na,,_A A4..--- -I1- 1-. f-1- )I.n.i-.o.- sA,_t- -A tlhe

Hellenic Industrial Development Bank (HIDB). However, so far, only the

operation. The industrial estates in Volos and Heraklion are far behindscLed~u.le anit at' Patras It"ne lCan htaCs yet0 t-V be CCtJuir L dU

; Lntastaments empyug eV persons n 8ver :OUrce. AnnualIndustrial Surveys. See Annex tables 1.8 and 1.9.

- 16 -

1 .- A D_"O"t- _FF-Vta Ma knuavo an 4mnvaument ntupr thp nnQf An

mentioned (in para 1.22) about 15 percent of the Public Investment Program-f th centra1 government is to he allocated thrnuh Ic-a1 nsthorites and

spent for over 2.000 local projects, such as provincial roads and smallscale irrigan woks, etc The expenditure of the Cnai-al Ran-inal

Public Investment Program in 1968-70 was about six times larger than during10K, _ Af th name time, mak. - .nvetmentexpvnditure in electric powertelecommunication, transportation, technical schools and other infrastructuresIla ve conrbt edU LL Lo LLCe incre aso inom inttf les deOAveloped. reios

- 17 -

TT. RMONOMTC qECTORS

A. Agriculture

2.1 Agriculture manmts -fr ant One-fifth Of the GDP, 53 paAnt otftotal exports earnings, and nearly half of the total of the working popula-t tifn 1n air r, 4to nraAm4nann-a 4 rfa-14n4nr,

2.2 urin thedecae to1970 the gr^hrt f t-he nagr,lturlsc!r-

tor was around 4 percent per annum or about 2/3 of the growth rate of totalCDP. The Five-Year Plan target for 196801072) 4saotpecn Hwvrtaking 1967 as the base year, the growth rate has been less than 2 percent

pe a..nnum, parl. .y buseO~ Ith base year, 1967, w as a good'.. c r year,. Al

changes in the composition of output, pursued as a matter of policy, im-plidI a slowuuwn in uhe expaniou of omue 16arLA-4t.4onal c-ros A high voumueuand value (e.g. wheat, tobacco, olives) and the encouragement of othercrops eiher vf copvaratively Low volume ke.g. vegeabLKeso, MIIA6aL L ULwith low value (e.g. fodder and feed crops). The measures to adjust pro-uucLAA Lo UemdU LdVe prdUV rUeU liAL LLUm UUULlsme Surlus ULB tU Lley

also resulted in a temporary depression of the total value of output asLIIe A L s lite U fUL LL UVelUpmeLIL U LIeW LUps alU LAe cU1VeLLULL UL ±oW

value commodities such as feed and fodder into high value meat and dairyproducts.

I 1 LaCL remains LL, noLWiL[sLUuig a SubLLaa iLnCrease .1

public and private investment, and an actual level of expenditure which hasueEn substantially as planned over the past three years, growt- 01 agricul-ture has lagged behind the other sectors of the economy because of structu-ral, organizational and financial constraints.

2.4 The small and fragmented farm holdings resulting from populationpressure and a limited area of arable land are a major structural obstacle.Average holdings are 3.3 hectares and consist of 8 or more parcels of land.Traditional cropping patterns tend to perpetuate because of the inertia ofcustom, Lhe desire for security ana tne limitations imposeG Dy climate andresources on the options for alternative and intensive use of land. Farm-ers are reluctant to change from long-established crops like olives andvines to annual perishable crops and intensive horticulture. Those wholack financial resources, as most Greek farmers do, require convincingdemonstration and persuasion for accepting such a change.

2.5 Irrigation is the chief means of promoting rapid agriculturalgrowth as it: enables diversification, yield improvement, and transformationof farm structure in a package approach - consolidation is compulsory inirrigated areas. However, Greece is relatively poor in water resources.The maximum exploitable surface and underground water is estimated at 9.6milliard cubic meters, which can irrigate a total of 1.6 million hectaresor about 40 percent of the arable land. Exploitation is also expensive; in-

- 18 -

vestment costs for surface water exceed US$2,000 per hectare !/. Between1965-1970, the irrigated area expanded at 4 percent -- the same as GDP inagriculture. The pace of consolidation has tended to be in line with theexpansion of irrigation.

2.6 Rapid growth is also impeded by anomalies in the labor situation.While hired labor is scarce and relatively costly, the total labor forceemployed in agriculture is excessive and there is significant but decliningunderemployment among farm families. Labor-substituting machines are in-creasing in number but their use is not keeping pace with the off-farm move-ment of labor. This is due largely to the diseconomy of small scale imposedby farm size, and a shortage of repair and other facilities.

2.7 With reference to the development plan, administrative short-comings have resulted in disparities between planning targets and perfor-mance. Some projects have been inadequately prepared. A number of pro-posed supporting policy measures have not been implemented in the threeyears since the plan was launched. Reorganization of the public serviceshas been effected only partially, leaving the higher echelons untouched.Certain institutions, including those for encouraging land purchase, havenot been established. No legal measures have been taken to alter the lawof inheritance and dowry custom, which encourage fragmentation of holdings,nor has a land market been created. Problems with regard to range manage-ment and pasture improvement, and the complex situation arising from com-munal ownerships of and rights in large grazing areas, have not yet re-ceived serious attention. These are vital to the future of the livestockindustry. Certain other measures, such as the creation of agencies foragricultural marketing and for the supervision of cooperatives, have beensubjected to lengthy departmental studies and their implementation maynot be possible until after the plan. Similarly, the streamlining of thecooperative system and reorganization of the Agricultural Bank of Greeceas a credit institution continues to be deliberated. Other measures havebeen initiated only recently and their impact is not yet apparent. Thisapplies Particularly in the case of the livestock subsector, which accountsfor one-third of the total value of agricultural production. Furthermore,orovision for the extension services, the research organization, and voca-tional education are inadequate and their equipment as well as number andquality of staff need imorovement.

2-R Financial limitations relate to the allocation rather than thetotal volume of funds. Total investment in agriculture increased from5.5 billinn Dr. in 1967 to 7.6 billion Drs. in 1970. This was close to

the Plan target for the sector and also to its planned share of 12.3 per-cent in tnta1 investment. However, irrigation engineering works absorbed75 percent of the investment, leaving insufficient resources for on-farmdevelopment an live nrk Improvements. Implementation scheduling has

been a major problem. Too many projects were started at one time, giving/ U ngr o tunatirn deveoeI TAth nt riirn nn rnaitvl mh the end of

I/ Underground water development costs are comparatively much cheaper.

- 19 -

1970 more than halF nf the nlannpd PcnPndiftvrP nn mainr wnrkc had hen

made but only one-third of the area commanded by them had received water.in these circ,ums-tances, the targets for dIeifctc n ±nreased poduction could not be attained.

Economic Policies and Their Impact

2.9 Price supports, subsidies and other measures have been used to

ures have included outright grants, guaranteed minimum prices to the pro-

of infrastructural facilities, participation in the equity of agricultural~LLL~LjiLA.L. IULL A.Ll IL . L J.aB LUIU L. 11 BIU LL L~UL LU .L~.I1 U U AU.

dized exports of agricultural products, and manipulation of consumer prices

Government financial commitments from less than 600 million Drs. in 1963LU [HULC LLudit 'of U.LAAAUL U.LDe AARE 17U /* AH~ A LL aulJULIL LCJLCDCLCU IV

percent of the total current budget and was nearly 85 percent of the devel-opi-tnt exeJtureb on agriLuLu in LnLd year. riopniove, onn armplexityL a

of the support programs tended to obscure the real issues, reduced theirvalue as iLLcenLiVes andU ULUtLeU Llh e UL Vfavailab L UUCCU 11I

system was therefore modified in the current plan, with the following broadobjectives:

(a) To reduce the financial commitments of Government;

(b) To make a clear distinction between social and

economic objectives;

(c) To influence the level and composition of production;

(d) To increase private participation in marketing operations;

(e) To harmonize price and support policies with the EEC.

2.10 The measures adopted included the following:

(a) Instead of guaranteeing minimum prices, a new concept of"intervention prices" was introduced. The Government will nowbuy a commodity only if its price falls below the interventionlevel, otherwise private trade will operate freely. This

arrangement has saved the Government from incurring high costson organization and marketing, and from losses in storage.

(b) The scope of several direct and indirect subsidies was changed;

some will taper off over a few years (e.g. subsidy on milk).In some cases, it will be a one-time payment (e.g. subsidy onimprovement of ranches and import of high quality stock)instead of a continuing payment (e.g. price support).

- 20 -

kc) Prices for a number of major products were lowered, in orderto limit output and reduce the Government's commitment, as wellas to make agriculture competitive with the EEC countries. Atthe same time, a policy of direct income support, unrelated toprices, was introduced with the objective of protecting farmersin poorer areas. These income support payments (for wheat,barley, raisins, cotton, tobacco, citrus, etc.) though made ona produce weight basis, are paid some months after the cropshave been marketed so as to reduce their association withproduction. Nevertheless, they tend to encourage output ofsome products in surplus production. Payment on an area basiswas tried but abandoned as impracticable. (See Appendix andAnnex Table 7.9 for details of agricultural subsidies.)

2.11 As a result, there has been a slowdown in the production of tradi-tional commodities such as wheat, tobacco, and raisins which could not beexported without a subsidy, and an acceleration in that of products suchas fruit, vegetables, feed grains, fodder crops and sugar beet which havedemand at home or accessible foreign markets. In addition, the competitiveposition of traditional export products (e.g. tobacco and raisins) has beenimproved through varietal changes and better packing and grading arrange-ments. A change over from soft wheat to hard wheat is also beginning. Inthe livestock sub-sector, output of pork and poultry meats and eggs hasincreased rapidly, mainly from highly commercialized enterprises and maysoon exceed demand. Milk production has also increased in response todemand from dairy plants and supply of feeding stuffs at concessionaryrates. This development has revealed a large hidden potential for milkproduction from existing cattle, and this potential could be exploitedfurther by expanding the market for fresh milk and milk products which arepresently imported. Veal and baby beef production also increased in res-ponse to subsidy and bonus given for fattening of animals. Traditionalbeef production, however, has remained substantially unchanged due to in-adequate support incentives, absence of any exclusive organization (likethose for cotton and tobacco) to extend effective measures in remote areas,and also because of the unfavorable meat import policies in the past. Someprogress may, however, be expected in beef production in consequence of theintroduction, in November 1970, of new incentives and the establishment ofcattle breeding and fattening units with continuing import of foundationstock.

2.12 The Government intervenes in the marketing process when pricesfall below a stioulated level. So far, Government purchases under the

support program have been non existent for some crops and negligible fornthprq- hut this may be attributable nartlv to reduced production in the

crop years 1968 and 1969. Disposal of stocks has been successfully pursuedthronh lnwred nrirp, fnr wheat in the lrAl and exoort market. throueh

international cooperation for currants and sultanas and through bilateraltrade with the TRp for tnhacno nnneqntly - there has been redction

in costs of storage and losses during storage. The stock position in recentyear isa ol----

- 21 -

Vea ending December 31 Wheat Currants Sultanas Tohacc

-------------- ('000 Tons)---------------

1965 303 3 12 6610A 117

1967 66 26 6 6710t.O1 11 A

1970 3 31 7 37

Source: Ministry of Agriculture and National Tabacco Board.

2.13 The measures adopted so far have substantially reduced obstaclesto development and initiated desirable changes. However, acceleration ofthe change over from supports which enter consumption to subsidies on themeans of production, including land purchase, is desirable.

Measures to Promote Agricultural Development

2.14 In the 1968-72 Plan, investment in agriculture is projected at39 billion Drs., an increase of 65 percent over the investment in 1962-1966.Of this, the public sector was to account for 15 billion Drs. and the pri-vate sector 24 billion Drs., reflecting an increase of 54 percent and 73percent respectively over 1962-1966 figures 1/. The share of agriculture intotal investment, however, was to decline from 12.9 percent in 1962-1966 to12.3 percent in 1968-1972 because of a fall in the share of agriculture intotal public sector investment from 18.6 percent to 14.4 percent. Thebreakdown of the planned public sector investment by subsector and by pro-iects is not available in detail. The available information indicates thatirrigation will absorb about 75 percent and forestry and fisheries another15 Dercent, thus leaving about 10 percent for all the remaining crop andlivestock subsectors. Irrigation undoubtedly calls for priority considera-tion but perhaps not to this extent. (See Annex table 2.9)

2.15 The plan has as its target a growth rate. for the aross productof agriculture, of 5.2 percent per annum (1967 prices), with fisheries grow-ina at 9 Dercent, forestry at 8.5 percent. livestock at 7.6 percent and cropsat 4.7 percent. These targets are to be realized by the following measures:

(a) Improvement in the size and structure of holdings;

(b) Hechanization of agriculture;

(c) Irrigation and land reclamation;

1/ Thp Cpntra Government envianged rn invear Dr. 11.9 hillinn in arirtil1-

ture and forestry during 1968-72, i.e. about 19.6 percent of the totalPihlir TnupQtmpnt Prnarnm nf thp rontral anvprn mpnt Tt in nrnhnhlp

that the actual investment will be Drs. 13.6 billion. (See Annex table2.10).

- 22 -

JLJ 11 1Xt: .LCA.L4cL..LJL1 V1 1rLLUJ.LULJJ.L k1.LLiV.LL.LUb ZIOLM i J IJLb±V

programs in selected areas.

2.16 The area consolidated annually during 1968-1970 was 40,000 hectaresper year, as compedu oU les tan 3u,UU nectares a year durug i903-170L.However, it is still below target. The increase was wholly in areas irri-gated by government schemes, where consolidation is compulsory. The rate ofvoluntary consolidation decreased sharply, partly because the agenciescharged with the consoliuation effort couid uo litte more than keep pacewith the irrigation projects. As mentioned previously, no steps have beentaken to change the basic causes of fragmeLation or to encourage tne de-

velopment of a market in agricultural land because of reluctance to takeactive steps rrom rear of possibly adverse social and economic consequences.Consolidation is regarded as a measure which must be taken in irrigated areasto allow a rational distribution of water, rather than as a means of creatingmore viable farm units. For this reason, and because of organizational andfinancial constraints, further acceleration of the work seems unlikely, un-

less a change of attitude toward consolidation takes place.

2.17 The target set for the mechanization of agriculture during the

plan period is a 70 percent increase in the value of machinery employed; andthe incentives offered are subsidies of 20 percent to 50 percent of cost to-

gether with low interest loans. It seems probable that the target, as such,will be surpassed. Machines tend to be regarded as status symbols more than

agricultural tools, and reducing their cost is not likely to encourage eco-

nomic utilization. A continuing reviEw of the effects of the subsidy is

necessary if wasteful investment is to be avoided. The present tarm struc-

ture imposes a very severe constraint on effective use of machinery, to the

extent that some costly items (such as cotton pickers) lie idle or are gross-

ly under-utilized. This is partly because some types of machinery were in-

tended for custom renting for which the demand was less than expected.

2.18 Implementation of irrigation and land reclamation work is proceed-

ing according to plan in financial terms, but not in terms of the areaactually supplied with water. Against the annual increase of 45,000 hectares

set as a target for all irrigation, both state and private, the achievement

has been about 30,000 hectars per annum. Of this, approximately two-thirds

was developed by the private sector and only one-third by the state. About

three-quarters of all public investment in agriculture has been allocated

to irrigation. Progress in the public sector was slow, mainly due to in-volvemen . in too many projects with slow construction schedules and con-

sequent implementation difficulties. In the case of ten major and a scoreOf smaller current projects, more than half of the estimated cost has been

expended but water has been delivered to only one-third of the area served

by the schemes although it was partly due to unavoidable time-lag. Effortsa-e now being made to hasten completion of the existing works by a diversion

funds within the plan allocations and better preparation of the new

- 23 -

projects 1/. However, so far, the effect has not been much because the com-mitments and the stages of implementation of most projects leave little roomfor maneuverability. Consequently, it seems unlikely that the annual in-crease of the irrigated area will exceed 75 percent of the target figure inthe next few years.

2.19 Applications of technology to improve cultivation standards in-clude mechanization and the introduction of new production techniques.Special emphasis is to be placed on improved seed and planting material,better breeding stock, and increased use of suitable fertilizers, pesti-cides and weed killers. Between 1967 and 1969, the aggregate productionof improved seed of all crops was almost doubled. In relation to the coun-try's total annual seed requirement an even greater acceleration of outputis called for. Considerable imports of high quality breeding stock of beefand dairy cattle, sheep, pigs and poultry have been made, and more areplanned. In the case of pig and poultry production, the results have beenimpressive, but in the case of cattle the imports of foundation stock havebeen too small to produce any immediate impact on beef output. Consumptionof all fertilizers has continued to rise; inputs of nitrogen. phosphate andpotash increased to 200,000, 119,000 and 18,000 tons, respectively in 1970.This was 37 percent, 17 percent and 31 percent higher respectively as com-pared with 1967. Local production of nitrogen and phosphate fertilizerswas only slightly less than the demand in 1970. The pattern of fertilizeruse has also changed, generally for the better, in response to the profit-ability of various crops. The auantities used on tobacco and olive treesdeclined, but applications to citrus, vegetables, legumes and cerealsshowed sinificant increases. The consumer orices of fertilizer has beenkept unchanged since 1958, but the element of subsidy (excluding distribu-tinn enatm show. a oradual decrease owine to lower rnocurement costs of

certain types of fertilizer. The distribution of fertilizer is handled bythe AR.- This arrangement Pn.ures uniformity -of nri.cz in n1l nArts of the

country and the passing of subsidy benefits to farmers; but distributionnsts are rising with the increainc unlime nf fPrtil17r handled Tr

would seem desirable to continue this arrangement while fertilizers areanhaidi cepd hut the hanir niip.tion ^f aith%tidv ahmuld he reviewed to dptpr-

mine (a) the merits of its continuation; (b) the effective minimum level,and (c) the daes hility and manns of renuning thp inpronino dIstrhitIoncosts through raising the price of fertilizers.

2.20 Technological developments were largely financed by the 175

low-interest credit to about 90 percent of farm families. This increasedat 1_5. pecenS per ye from nrs. 11 bi114- in 1Q67 to Drs. 16.6 bil14n

in 1970. Of this, medium and long-term lending increased from a very low

A/ An irrigation project in Crete is being prepared by a group of experts

development is being entrusted to a firm of foreign consultants. FAO

paring an integrated livestock project in Northern Greece.

- 24 -

level by 17.5 percent per year and accounted for Drs. 3 billion in 1967 andnearly Drs. 5 billion in 1970. Some basic weaknesses in the credit systemremain uncorrected. Interest rates have remained unchanged for severalyears: ranging between 2 percent and 5 percent depending on the purpose ofthe loan. Such rates may be criticized as too concessionary, especially inview of the fact that many of the commodities to be purchased through loansare also subsidized. In addition, the credit is accompanied by the desir-able but expensive supervisory service provided by the ABG through a staffor more than 550. The readiness with which debt relief is granted doesnothing to improve the repayment record. Moratoria on certain debts to theABG were declared in 1963 and again in 1968, the latter costing aboutDrs. 8 billion in public funds. Certain types of short-term loans are givenwithout assessment of the agricultural need for them. In consequence, aconsiderable proportion of the available funds goes into consumption ratherthan farm development. In addition, the switch to medium and long-termlending is slow. Its pace and more importantly, direction need to be care-fully reviewed.

2.21 Plans to strengthen the extension service have been made, on thebasis of the new regional reorganization, but little has yet been put intoeffect. The number of agents in the field continues to fluctuate between325 and 390, compared with an approved establishment of 500. Of the postsproposed in the plan only about 30 percent of the specialist posts at inspec-torate level and at the district level about half as much, had been filled inearly 1971. It is expected that recruitment will bring the field strength upto 90 percent of establishment in 1971. This should be possible since theoutput of agricultural graduates now exceeds the demand, but it does meanthat the new staff will be largely raw and inexperienced. Recruitment andtraining of specialists to provide a backbone for the service will be moredifficult. Some improvement has been effected by grouping. Instead ofposting individuals to remote rural areas, the agents are now being sta-tioned in groups of two to five in the larger centers where they can havebetter living conditions. The new arrangements, however, imply more exten-sive travelling, and facilities for travel remain unsatisfactory. Theservice appears to be subject to financial constraints, especially as re-gards travelling and field allowances, and the field workers' terms ofservice are said to be inferior to those of comparable employees of theAgricultural Bank and other agencies.

2.22 Regionalization of the agricultural services has commenced. AnInspector of Agriculture has been put in charge of all development servicesin each of the seven regions of the country. Decision-making at regionallevel should result in more effective coordination of activities. The pro-posal to concentrate effort and investment in areas of high economic poten-tial has not yet been implemented. This is a sound principle which shouldbe pursued but intensive pre-investment work will be needed to make theapproach meaningful. Such work cannot be undertaken until the field termshave been built up to an effective level.

- 25 -

Production and Trade Prospects

2.23 The following tentative forecasts have been based on the perform-ance of the sector in the recent past and current trends. It is implicitthat these will not be disrupted by major political, technological, or otherchanges and that present policies will continue. The GDP in agriculturewould increase at a rate between 4 percent and 5 percent per annum. Themeat import bill should decrease following large increases in the productionof pig and poultry meat of which supply is about to exceed demand, pig andpoultry meats being substituted for beef and mutton to a limited extent.Some improvement of veal, beef and mutton production can be expected as aresult of incentives for fattening to higher weights and for dairy cattleof which beef will be a by-product. Arising mainly from increased incomesand partly from population growth and tourism, demand for meat will increase.Taking these factors into account, a reduction of 5 percent in the import ofall meats over 1970 levels may be forecast for 1976. Imports of dairy pro-ducts, mainly condensed and powdered milk, will be reduced if the two pro-posed factories in Macedonia and Thrace come into operation on schedule. Asmall reduction in cotton imports should be possible, partly because ofvarietal change in production and partly by larger use of existing localcottons. Drastic cuts in imports of maize and sugar may be expected as aresult of the current incentives to domestic production. Increased importsof certain feedstuffs, other than maize, will be necessary. Present programsfor increased outputs of olive oil, cotton seed and dairy products, includingbutter, should reduce imports of oils and fats. The imports of other agri-cultural commodities, which account for about a third of the total, willprobably stay at about the present level, though their composition willchange due to substitution in respect of certain commodities and new andincreased demand of others. On the basis of these assumptions, the totalimports of agricultural products are estimated to decline from Drs. 6.5billion in 1969 to about Drs. 6 billion Drs. in 1976 (1970 prices).

2.24 The forecast of exports assumes that the program of varietalchanges, especially for tobacco and fruits, will be continued, that EECprivileges and access to the East European market will be available and thatthe quality of produce will be raised at least to the level of that of com-peting countries. Greater emphasis on the marketing of fresh fruits andvegetables in the European market is particularly important. Tobacco ex-ports are expected to increase by only 2 percent per annum due to marketlimitations. Cotton exports after meeting increased level of local con-sumption may increase by up to 4 percent per annum. Olive oil exports areexpected to be confined to brand name exports, because of increasing na-tional requirements and relatively higher prices than other vegetable oilsand fats. With the subsidized feedina projects being continued, cerealswill practically disappear from the export list. Sultanas and currants areunLkelv to show any marked increase. due to world ov,ruroduction and com-petition in the export markets. On the other hand, fresh and preserved fruitand vqlirnei lhould record an inreaqt- of between 11 nereent and 12 nercenta year. Hides and skins, cheese and "other" products are expected to in-crnse h out 5 nerrnt avear- This will inrease the exnort earningsfrom agriculture at about 4.3 percent per year, from Drs. 8.9 billion in 1969

- 26 -

to about Drs. 12.0 billion in 1976 at 197 prices The farorable reIl bal-ance in agricultural products which was nearly Drs. 2.5 billion in 1970, isthus expected to inease to Drs. 6.0 billion in 1976 at 1970 prices.

B. Industry

.LLJI n11 1U L,Luuosty If cULLLIULOU oU n) LLCLL uL tut e ec LULLit ricLLUL

cost and nearly one-third of GDP at 1958 factor costs. About thre,-fifthsU LLC UUL U LLP oULUL ULsititIdLr 1r1 LndLUsn LUL 11 Hnau g neaL i ULL-LLI.LIU Lconstruction, and less than 5 percent in mining.

Performance of Manufacturing Industry

2.26 The structure and recent growth of manufacturing industry areshown in Table 1. Value added in manufacturing at 1958 prices has increasedat an average rate of 7.6 percent per year during 1959-69. Growth has beenassociated with structural change and the share of basic metals, chemicalsand metal manufactures, engineering and equipment has increased while thatof food and textiles and associated industries has gone down. During 19o-1970 production increased at about 9 percent per year or somewhat lower thanthe rate of increase programmed in the Five-Year Plan.

.27 Employment has increased by about I percent per year. tis rela-tively slow increase may in part be due to the changing structure (if manu-facturing which is indicated by the decline in the share of food and clothinggroup (from 55 percent of the total in 1958 to 44 percent in 196q) and theincrease in the share of chemicals, metals engineering and equipmunt manufac-ture (from 23 percent to 30 percent).

2.28 The value added per worker in 1958 prices has increased at anaverage rate of 5.8 percent per year during 1959-69, but there has been awide difference between productivity growth among industries. Output perworker increased most rapidly in basic metals, non metallic minerals andchemicals, three industries that supplied 55 percent of the manufacturedexports in 1969. Productivity increased at a medium rate in food, textilesand associated industries which supplied over a quarter of manufacturedexports in 1969. Productivity increased least rapidly in the metal manu-facturing engineering and equipment industry and in the industry producingpaper, wood products, etc. It is interesting that these industries contri-bute a small share of total manufactured goods exports.

2.29 Total exports of manufactured goods have increased at ai averae,L te o: 28 percent per year during 1960-69 2/. This represents part ly ;n

1/ Mi1ning, manufacturing, constrii(A fon anid powor.

11.1 . pt.. . . . . . . . .1

as, comiparedl to o1)0 v 18 pe)rcont per year betwecil 1060~i and 1()W. b>u

CC1rkI.'- I %,, t h tie 1)'11;111ce ofI palvlwi2t' s dat a o f t1e i I II Ieecc ce III 0 - -........ -.

- 27 -

abroad and the need for improved efficiency whether producing for the do-mestI. or export marketsL. ar"Lly Lt relects tL1e esti-b.LbishmentL ofa. fe

large export-oriented mineral based industries, e.g. aluminium and nickel.The duty free access to rE markets provideu by Ce T]reaty of Athens is amajor factor in the change in the orientation of industry. About 45 percentof the increase in exports between 1958 ana 9o9 came from base metals,about 13 percent from textiles, clothing and footwear, 10 percent from chemi-cals, and 7 percent from food industries. The metal manufacturing andengineering industry contributed only 3 percent of the total increase inexports of manufactured goods in this period.

2.30 Despite the rapid growth in industrial exports they still repre-sent a small, though increasing, proportion of production. In 1960 only1.o percent of all industrial output was exported. By 1965 the percentagehad only risen to 2.3 percent but by 1969 was 6.6 percent. In the latteryear, however, this overall figure disguises the fact that only the basemetal industry (45.3 percent) and the chemical industry (6.2 percent) ex-ported more than 5 percent of their output. e nnex taue o.U.

:1.31 in the sixties there has been no significant change in the pro-portion of domestic consumption of manufactures that is met by domesticproduction 1/. The growth of manutacturing production has barely kept pacewith the expansion of domestic consumption of manufactured goods, afterallowance is made for exports of manufactured goods. This is so for allindustry groups. For example, domestic production accounted for 34 percentof apparent consumption of metal products, engineering goods and equipmentin 1960 and 38 percent in 1969. In textiles, the proportions were 98 per-cent in both 1960 and 1969. However, in absolute terms the gap betweenproduction and consumption of manufactured goods increased from Dr. 15.6billion in 1960 to Dr. 28.9 billion in 1969.

2.32 In spite of a large expansion in industrial output there has beenlittle change in the size structure of Greek industry. Units employing lessthan 10 people continue to account for 95 percent of all units and for 50percent of all industrial employment though for only 26 percent of the totalof value added in industry. At the other extreme there are still only 188units, 0.2 percent of all units, employing more than 200 people, though theyaccount for 17 percent of all industrial employment.

1/ Domestic consumption is estimated as equal to production minus exportsplus imports in a given year. Imports of manufactures were 26 percentof domestic consumption in 1960 and 27 percent in 1969. See AnnexTable 8.8.

Table 1: STRUCTURE OF MANUFACTURING: OUTPUT,EMPLOYMENT. PRODUCTIVITY AND EXPORTS

(in percent)

Value added En loment Produqtivity Exports9 1969 1% 1969 19';d4 196QA 1969/195bZh 1960/c 1969

Food, drink, tobacco 25.1 19.7 25.6 21.1 98 85 160 14.7 12.8

Textiles, Clothing and footwear 33.0 25.4 29.2 23.3 1106 103 15 12.4 15.2

Pa-wnvn+m -e,4 -"rAnant A-oO O) JO T I 1- 7 AQ <7 -19 LAq 1

Chemicals 6.7 13.4 3.1 6.0 221 266 222 32.8 12.3

Stone, clay and glass 6.3 8.7 5.4 6.1 116 141 225 4.2 2.8

Basic metals 1.4 5.0 0.7 1.1 198 618 581 4.0 40.8

Metal manufacturing,engineeringand eciuirment 14.3 16.8 17.7 22.7 81 69 157 15.0 4.5

Others 2.5 2.1 3.9 4.0 63 46 138 12.7 9.7

T1ta L%.U LW.UV LA.V A%PU.V L..U 1VV L%A.UV LAJV(Total)/d (13.7) (34.1(X"l.2)(5ML.6) - - - (25.9) (237.1)

/a Index of value added per worker at 1958 prices in each industry group, with averageUMVA.U -a *

/b Index of value added per worker in 1969 (at 1958 prices) with 1958 - 100

/c 1960 is chosen as exports of mazfactures in 1958 were quite small.

/d Value added in billion draohmas, employment in thousands and exports in million dollars.

- 29 -

-. ) Government inuustrial policy is based on the recognition 01 mRe

fact that under the treaty of Athens a free trade situation vis-a-vis theEEC countries wili be established for certain products by 1974, and for all

industrial products by 1984. The task of improving the competitiveness ofGreek industry is regarded as the primary responsibility of private enter-prise with Government assistance in the form of suitable business climate,institutional and administrative reforms, direct inceni:ives for investmentand exports, provision of infrastructure, the encouragement of foreign invest-ment and the provision of funds (mainly through the Hellenic industrialDevelopment Bank).

2.34 In general, the Government abstains from "directing" industrialinvestment into specific industries considered to be more desirable 1/, andthe allocation of investment in the manufacturing sector is determined byprivate enterprise in the context of the available "neutral" incentives.While the "imposition" of rigid a priori industrial priorities is undesir-able, there is some danger in the other extreme of comiletely uncoordinatedprivate enterprise. For example, applications have been approved for 8shipyards while the existing yards are underutilized. Enough thought doesnot appear to have been given to the "industrial mix" which would be inthe longer term interests of the country. In any case the system of incen-tives cannot be neutral in its impact, e.g. the benefits of a concessionaryinterest rates would vary with the capital intensity of industries.

2.35 It must be pointed out, however, that in practice private enter-preneur investment decisions are subject to regulation. All investments

are licensed by the Ministry of Industry and occasionally proposals that

are considered unsuitable are rejected. For example, for some time applica-

tions to establish tomato paste producing enterprises were rejected because

of the "overcrowded" conditions of the industry. Encouragement has alsobeen provided to the shoe industry by a generous interpretation of the con-

ditions for granting incentives.

2.36 The home market still enjoys a fairly high degree of protection.

The ratio of import duties collected to the value of imports subject to tax

was 15 percent in 1970. For some product groups, e.g. clothing and footwear(33.2 percent), stone clay and glass (27.6 percent) and textiles (24.9

percent) the ratio was much higher.

1/ The Five-Year Plan states that "the incentives granted should be as neu-tral as possible, from the point of view of their effect on the alloca-tion of economic resources. These incentives should aim to form afavorable business climate, so that each businessman concerned may be ina position to take sound decisions in his own field of activity..."

(page 113).

- 30 -

JLacLUub AL1 t161VU0 uxc ULLULU LUL [LW I11Vt.LIiCILD, , diLL CUdliforeign investment, and for exports 1/. For foreign capital, rcpatriationu capital anU profts iu 1.0-1-eign eXk_L1U[1rU 1ung IIUweu WIILuILL 'p5kC1L,CU 11-mits; special tax rates are applicable; and a lowering or exemption fromimport duties on uiaclin.ury and appitances for ibtUllation is al Lo(u.

Until the end of 1972, for all enterprises in Greece, tax charges on netprofits will ve waivu d Lfte profits are useu to iCkquire new assets or tOfinance limited increases in working capital. Increased depreciationcharges are also aI1UWeU UILil Lt same date. i1 adiLion, Llle Stlte mayalso subsidize part of the interest payments on loans. Further "rogionalincentives" are offered if the plant is established outside tnePiraeus districts.

2.38 Major export incentives are duty free import of material.s andfuels used to produce export goods; exporters may deduct a percenage ofgross proceeds from exports from their taxable profits; social insurancecontributions are reduced; no turnover tax is payable on proceeds fromexports; and concessional interest rates are available on borrowed capitaldepending on the proportion of domestic value added and the proportion ofexports to total output.

Industrial Problems

2.39 One feature of recent industrial development is that the oppor-tunity provided for the development of small medium industries by linkingthem with the large recently established industrial plants (e.g. Aluminium

de Grece) either as markets or as sources of supply has not been exploited

sufficiently. Many of the large undertakings thus tend to remain somewhatisolated from the rest of the Greek industrial scene.

2.40 One of the major advantages enjoyed by Creek industry is that Greek

labor is still cheap by West European standards but the difference between

the two continues to narrow. During the next ten years the agricultural

labor force is expected to decline still further and this source will provide

any unskilled labor that industry requires. Skilled labor, however, is ex-

tremely scarce, and the shortage is reaching critical proportions. Emigrants

returning from West Germany cannot be relied on to fill the gap partly be-

cause it is doubtful if a significant proportion of them are really skilled.

A further expansion of vocational training is required.

2.41 Management resources, are, if anything, more scarce than skilled

labor. Foreign companies are solving the problem by using their own nation-

als while the more successful Greek companies can recruit the best talents

available from a very restricted field. In general, there is a great short-

age of professional managers. Even in the best companies it is often diffi-

cult to find suitable candidates to fill middle and junior management posi-

tions. There is an urgent need for a business school and for professional

1/ It should be noted that although the incentives are generous, Greece

does not offer investment grants and limits the repatriation of earnings

on foreign capital.

- 31 -

bodies similar to the American Marketing Association and the U.K.'s Instituteof Cost and Works Accountants.

2.42 Greek industry is still typified by the very small unit and someindustries such as footwear are dominated by them. They present a partic-ular problem as they usually cannot afford to employ highly skilled andhighly paid managers. Alternatives open to them include amalgamation intolarger units which could afford such managers; undertaking joint ventures;or being given advice from a central organization. Unfortunately, there islittle encouragement for mergers, and joint ventures such as those proposedfor the shoe industry in the area of market research and selling have, asyet, made little headway. The Centre for Small Scale industry was estab-lished to give aid and advice to the small production unit. It is a com-paratively new body and is still identifying the problems that exist.

Prospects

2.43 The business climate is favorable. Industrialists are in generalvery optimistic about market prospects, particularly in export markets.Industrial investments are continuing at a rapid pace. Therefore, indus-trial production may be expected to continue to grow at about 10 percentper annum. There are specific programs to increase capacity in the basicmetal industry, in the cotton textile industry, in paper production, andfor the production of nvlon and volvester filament. Shipbuilding will ex-pand though greater utilization of the existing yards, especially if theSuez Canal is opened, and because some, at least, of the new yards approvedwill be built. Although plans for the steel industry are not clear at pre-Rent the outcome is likely to be a major increase in capacity. A car assem-bly plant, to be built by Renault/Peugeot now looks a distinct possibility.The Gnuernment is now also considerine a Drooosal for a factory to oroduceheavy duty trucks and agricultural tractors.

2.44 The two major "package projects" now in hand, financed by Mr.nannin and Mr Niarchos. if comDleted on schedule, would make a major con-

tribution to future production of oil, electric power, alumina and aluminium,rhPmJi. and diesel ensines. It is expected that a number of industrialproposals included in the "packages" would be implemented by others if forsome reason their implementation in delnayed.

2.45 Preliminary offcir-ia estimates exnect a growth rate of industrialexports of about 18 percent per year during the next five years. TheAnnac/Mnirr-hna rnmnlaye if cnmnleted on time wnuld ornvide 21 na-rrpnt nf

all industrial exports by 1977. However, the base of industrial exports4i not ex-eted te widen very mieh- Tn 1Q70- texti16. and hasir met-n1s

account for 54.5 percent of the total, whereas by 1977, these two sectors,

for 54.8 percent of the total.

2.46 In the long run, production and export growth will continue ifaction is taken now to solve some of the inlem thbh st o beset theGreek industrial sector. Such problems include the absence of any scale

- 32 -

of priorities for attracting new industries or expanding existing ones;the continued predominance of small, often uneconomic units and the lack ofan effective body for helping them; the shortage of skilled workers; thelack of enough well trained and experienced managers at all levels; thegeneral imbalance caused by over-reliance on a few industries such as basicmetals, chemicals, and textiles. incentives for export and protectivetariffs are gradually being reduced. Yet these advantages still exist.In certain cases companies are enjoying the snort-term benefits which theyprovide rather than using this "breathing space" to re-equip and reorganizeto meet the growing competition that will come from the EEC.

C. Infrastructure

Transportation

2.47 In 1965, it was estimated that about 55 percent in ton-kilometersof goods transported were handled by road transport, 30 percent by maritimetransport and 15 percent by the railways. Most passenger transport washandled by road. More recent data on goods transported by road are notavailable, however, the rise of the motor car and truck fleet by 14 percentper year indicate a heavy increase. Domestic maritime goods and passengertraffic respectively have grown by about 13 and 7 percent annually.

2.48 While the transportation sector is fairly well developed, modern-ization of some sections is necessary to further general economic growth.During the Five-Year Plan (1968-72) over one-fifth of total public invest-ment and 29 percent of the central government's investment budget is to bespent on transportation 1/. About three-quarters of these expenditures willbe for highway construction. In spite of the priority given to the sectorin public investment there is little evidence of real transport coordina-tion. There are several ministries dealing with transport matters but nonehas an effective planning office.

2.49 The highways represent a reasonably dense network and no point is

very far from a public road. In 1968 there were about 8,000 km of nationalroads and 27,000 km provincial roads of which two-thirds were paved. How-ever, the improvement of some sections of the road network is important forpromoting exports and tourism and for keeping up with the increasing traffic.The most important highways under construction are along an axis that passes

from the Yugoslavian border to Thessaloniki, Athens and Patras. Some of thesehighways are nearly completed. Some other highways - including the Egnatiahighway through Northern Greece - were started only in the last few years andare lonz-term undertakings. These heavy investments have been undertakenwithout clearly identifying needs and priorities on the basis of feasibility

1/ In the original plan the share of the sector was envisaged to be 26 per-

cent of total central government's public investment program. See Annex

table 2.9 and 2.10.

- 33 -

studies. A road maintenance study is underway and UNDF assistance is beingrequeste for aU roa reconnaissanceQLI survey. ,

port sector study, covering highways, railways and ports, seems to benecessary. BidesLU sortie igh~iway J..LL1c:tLLLL6 Uy $Lt_ "-.LJJV expenu.li ture 'or

highway construction and maintenance have been financed via a Highway Fundwilich is fed by tax revenues from fuels and registration and license fees,which exceeded total highway expenditures substantially. However, most ofthe~ ne~w highiways stre L in the 'las 3PL yer ar bein finnce byL~ contracto

loans. (See para. 4.33)

2.50 The role of the railways continues to be modest; rail traffic hasshown practically no growth in recent years despite increasing subsidies tocover operating deficits. It is hoped that the recently established inde-pendently managed Railway Organization (OSE) may succeed in reducing thedeficit. Since January 1971, OSE has been only under general supervisionor the Ministry of Transportation but continues to receive subsidies fromthe central budget. The deficit in 1969 was over Drs. 800 million. Anamount of Urs. 2.2 billion was earmarked during the Five-Year Plan forimproving the 2,500 km railway system. Large investments are under dis-cussion: Drs. 21 billion in the next 12 years and a 5 year agreement hasbeen signed with Sofrerail to help OSE to improve management and study newinvestments. The proposed investments will be concentrated on the Yugosla-via border - Thessaloniki-Athens line (9/10 of investment) which needs im-provement and electrification to compete more successfully with the roadtraffic. This North-South line might be extended to Patras and togetherwith modern port services in Patras could help to promote trade with WesternEurope. A preliminary survey will be completed by mid 1971. It is hopedthat the proposal will be weighed against other priority transportation in-vestments.

2.51 The major portion of freight traffic between Greece and othercountries utilizes sea transport. More than half of the incoming shipmentsfrom abroad but only about one-fifth of the outgoing shipments are handledthrough Pireaus port. A large addition to the port is planned to handlethe increasing in- and out-flow of goods, which have risen by about 10percent a year. The Pireaus Port Authority hopes to finance the new portproject, involving about Drs. 10 billion, from accumulated profits. In thepast actual investments have been about Drs. 100 million per year.

2.52 Shipping is practically the only means of transport betweenmany of the islands and the mainland, as only a few islands have regularair connections. For improved communication with the islands faster andmore frequent transport services are required. Modern roll-on, roll-offshipping service from central collecting points such as Pireaus, Patras,and Igoumenitsa would help to bring the country closer to West Europeanmarkets. An integrated scheme for linking the development of agriculture,tourism and transportation would equire careful and coordinated planning.

2.53 Air services within Greece are provided by the privately-ownedOlympic Airways. To make air operations more economic and to promote re-gional development, tourism and exports several airports are under con-struction or planned. The completion of the jet airport at Heraklion(Crete) should have a favorable impact on tourism, particularly due to the

- 34 -

direct link with Western Europe. About Drs. 8 billion are regarded by theMinistry of Transportation as likely to be required during the next tenyears for construction of a new airport for Athens. The necessary studywill be completed at the end of 1971.

Power

2.54 The Public Power Corporation (PPC) is responsible for almost theentire electric energy supply. The capacity of the interconnected powersystem amounted to nearly 2,600 MW and the output was about 8,900 GWH in1970. Two further power plants are under construction. Thermal generationaccounted for about 70 percent of the total supply, about half of it basedon domestically mined lignite and the rest on imported liquid fuel. Theother 30 percent was generated by hydroelectric stations. Power consump-tion more than doubled in the last five years partly because of the estab-lishment of the aluminum industry which in 1970 consumed about 16 percentof total electricity sales. However, the average consumption per capita wasonly about 960 KWh in 1970. Due to the low consumption and to the neces-sity of supplying the islands and remote areas the average price of powerhas been relatively higher than in Western Europe: 1.0 Drs/KWh since 1956.However, Aluminum de Grece is charged a special price (0.45 Drs/KWh). Someother industries with high electricity consumption such as nickel, ferti-lizer and refineries also pay a subsidized price (0.5 Drs/KWh) with theState financing the difference. (See Annex tables 1.9 and 8.14)

2.55 The PPC expects demand to rise by nearly 15 percent annually overthe next 4 years and by 9 percent per year thereafter. This means one newpower plant of between 300-400 MW is required every year 1/. The totaloutput may increase to 16,300 GWH in 1974. Of the installed capacity of theinterconnected system in 1974 about 25 percent will rely on lignite-firedunits, 42 percent on oil-fired units and the balance will consist of hydro-electric units. To reduce the increasing proportion of power plants usingimported fuel, possibilities of making greater use of domestic energy sourcesare being studied.

2.56 PPC's investment program which is outside the central government'sPublic Investment Program, amounts to over Drs. 6 billion in 1971 and Drs 7billion in 1972 and reaches over Drs. 27 billion during the Five-YearPlan period (1968-72). During 1970-74, PPC's estimated capital requirementstotal nearly Drs. 34 billion. 45 percent for generation, 9 percent fortransmission and 44 percent for distribution. It is expected that Drs. 19billion will be financed from its own funds. Drs. 2.5 billion from Statefinance and Drs. 12 billion from loans (net). The gross borrowing needstotal Drs. 22 billion of which Drs. 4.6 billion will be loans and creditsin foreign exchange. PPC is not likely to face difficulty in raising thesefunds. Ahnut 90 nercent of the foreign credits will be suppliers' credits.some with a maturity of over 10 years. However, the volume of outstandingcreit.r with A relati- qhnrt maturity may tand tn finanrial diffirultips

if the revenues fall shorter than programmed.

1/ The power plant of the proposed Onassis refinery (2 units of 360 MW each)will add another 450 MW to the PPC system.

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Education

2.57 The Greek education system has high enrollment and ample numbersof academically qualified teachers at all levels. Illiteracy which wasabout 18 percent in 1961 (semi-illiteracy was about 30 percent) has declined

slightly in the last decade. However, inordinate concern for the role ofthe education system in preserving the nation's cultural heritage has re-sulted in an over-emphasis on classical education and a resistance to adapt-ing the education system to the needs of a changing economy and society.Enrollment in the academic secondary schools and in universities has in-creased disproportionately during the past ten years as compared to techni-cal education. Private technical schools, inadequately staffed and equipped,have attempted to fill the void created by insufficiently financed publictechnical education but results have been unsatisfactory. The technicalpost-secondary level of education has consequently become a critical bottle-neck, seriously restricting the numbers and quality of trained manpower atsub-professional level. (see Annex table 8.15) The Government is aware ofthis problem and has launched a program to make its technical educationsystem a more effective instrument for economic development.

2.58 Reorganization of the teacher training center and introductionof on-the-job training in some vocational schools, construction of manynew vocational training centers and of five post-secondary Higher TechnicalEducation Centers would help to improve the training situation during the

next years. In addition, more management, business and administrationseminars would be necessary as business training is unsatisfactory and thereis a need particularly at the lower level of the administration for better

trained and skilled civil servants.

2.59 Due to the shortage of skilled manpower and in order to overcome

regional and sectoral unemployment, the Ministry of Labor in cooperationwith several industries, has started a short-term trainina and retraining

program for adults and an apprenticeship scheme for different skills like

mechanics. welders. electricians. tailors, cabinet makers. shiovard work-ers, etc. From 1965 to 1970 the number of the graduates of the apprentice-ship schools increased from 700 to 1.100 per year, the graduates in retrain-

ing schools doubled reaching over 1,000, and over 1,400 graduated in short-term adult trainina courses in 1970. Industry regards these practical

programs as very successful and paid part of the costs, mainly by providingthe land. Furthermore, they have paid a minimum wage to the trainees.

Health

2.60 Health and welfare services are Drovided by a large number of pub-

lic, semi-private and private bodies. There is not much supervision by theMinistry of Social Services for services not directly nrovided by the Minis-

try, such as in state hospitals and county health centers. The Social Se-riftv 0ronni7_ntion, under which n1l urhn wnrkerq must ht inzured- is nelf-

supporting and the Rural Insurance Organization, under which the ruralplossiopn rativ madirnl narp nod th rugh siehilitae tnein nr rnd

loss compcnsation is mainly financed through special taxes. Maternity and

- 36 -

child welfare is provided by the independent PIKPA organization financedentirely by the state. The Queen's Charity Fund provides general socialwelfare and is financed almost entirely by several sales taxes.

2.61 Many hospitals are small and have insufficient equipment andtrained personnel 1/. Also the proportion of specialized hospitals is re-garded as too high and the construction of more and larger general hospitalshas been recommended 2/. Furthermore, most hospitals and medical serviceswere located in the Greater Athens area, resulting in people in the ruralareas having practically no access to the health and welfare services orreceiving inferior care. In the Greater Athens area there were approximatc-ly 80 inhabitants per bed; however, in some regions this ratio was over400. Over 50 percent of doctors, dentists and nurses are practising in th-Athens area. Attempts to overcome this long standing problem by compellingnewly qualified doctors to work in the provinces were not regarded to havebeen very successful. The lack of trained nurses and midwives, in generaland in rural areas in particular, lowers the quality of the health servicesand is probably the most serious bottleneck. (See Annex tables 1.9 and 8.16)

1/ There were 890 hospitals with 53,260 beds in 1968, of which 205 werepublic hospitals with 25,600 beds.

2/ See: A. Wood-Ritsatakis, Center of Planning and Economic Research: An

Analysi ot the LI' 1Cllealt I ,-11L J~ ~~

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III. MONEY AND FINANCE

A. Public Finance

3.1 The public sector comprises the general government - the Centralgovernment, local authorities and social security funds - and a few publicenterprises, e.g. the Public Power Corporation. The Central governmentreceives and disburses nearly 60 percent of the current revenues and expen-ditures of the general government sector and the local authorities about 10percent, the social insurance system accounting for the rest.

Public Savings and Investment

3.2 The Central government is responsible for about half of totalpublic investment, the rest being undertaken by local authorities and publicenterprises, (mainly the Public Power Corporation and the TelecommunicationsOrganization). Gross fixed public investment has increased at 16 percentper year from Drs. 11.7 billion in 1966 to Drs. 21.3 billion in 1970. Theshare of public investment in total investment has increased from about 27percent in 1966 to 30 percent in 1970.

3.3 Public savings were projected to increase at 27 percent per yearin the Plan and their share in financing public investment was expected toincrease to 44 percent in 1972. In fact public sector savings have recover-ed more rapidly than expected and financed 55-60 percent of public investmentduring 1968-1969 (Table 1). The savings performance of the public sectormakes the Plan target of doubling the level of public sector investment be-tween 1967 and 1972 feasible from the point of view of financial resources.The increase in public savings reflects the increase in the savings of the

-I

Table 1: PUBLIC SAVINGS AND INVESTMENTa_(Billion Drachma)

1960 1966 1967 1968 1969 1970

Public Sectorinvestment 6.6 11.7 13.5 15.0 18.7 21.3

Public SectorSavings 3.0 6.5 4.0 8.4 10.9

As Percent ofPublic Investment 45.4 55.6 29.6 56.0 58.2

As Percent ofGNP 2.8 3.3 1.9 3.7 4.3

a/ National Accounts basis

Source: Ministry of Coordination

- 38 -

social security funds, public corporations, and local governments more thanthe growth of the current surplus of the Central government (See Annex table2.15). During 1964-66, savings of the Central government accounted for 29percent of public savings. In 1969 the share had dropped to 23 percent.

Central Government: Revenue

3.4 The Central Government budget is classified into the "ordinary"budget (covering on the whole current revenues and expenditures) and theinvestment budget. The Ministry of Finance is concerned primarily with thecurrent budget, the investment budget being prepared in the Ministry of Co-ordination. The total current revenue of the Central government have increased at an average rate of about 14 percent per year during 1967-70 orslightly less than the rate of growth during 1961-66. The ratio of totalrevenues to GNP has increased from about 16 percent of GNP in 1960 to 20percent in 1970. Over 90 percent of the.total current revenue is derivedfrom taxation. 1/ (See Annex tables 5.1 and 5.2)

3.5 Government tax policy has been to improve tax administration andreduce evasion to secure increased revenue rather than to impose additionaltaxation. In fact a reduction of income tax rates was viewed partly as re-ducing the incentive to evade taxation. The ratio of tax revenue to GNPincreased from 16 percent in 1966 to 19 percent in 1970. While the incidenceof tax revenues has increased there has been little change in the structureof taxation. Indirect taxes continue to provide about four-fifths of totaltax revenue (Table 2). Customs duties used to be the most important in-direct tax, but with the gradual reduction in tariffs on imports from theEEC, their importance has declined. In 1970, 11 percent of total tax revenuewas derived from cuRtoms duties on imnorts as compared to 16 percent in 1960.Consumption and turnover taxes on imported goods are, however, more importantthan enaqtomn duties on them, and in 1970 accounted for about 20 nercent oftotal tax revenue. Taxes on domestic transactions (mainly on transfers ofrnentq1 inrliiAina rpn1 a-i-tp And atamn dirip%zl have increased in imnortanceproviding about 21 percent of total tax revenue in 1970 as against 15 percentin 1960. The remainderv of indirecat tax revenue~ is conlected riinfly fron

consumption taxes on domestic goods, the most important of these being taxes

.1 -a-1. 1 nn

Il Ine remaining iv percent s neiveu from state monupouliO, ouU11c

enterprises, fines and other miscellaneous sources.

Table 2: CENTRAL GOVERNMENT: STRUCTURE OF CURRENT REVENUE(in percent)

1960 1965 1970

Direct Taxes 20.5 18.1 21.3Income Tax 15.7 8.8 11.3

Indirect Taxes 79.5 31.9 78.7Custom Duties 16.5 15.3 11.1Turnover Taxes /a 11.8 12.0 12.1

Transactions Tax 15.0 14.1 20.9Tobacco Tax 14.2 11.2 9.6Other /a 22.0 29.3 24.9

Total Tax Revenue 100.0 100.0 100.0(in Billion Drachma) (12.7) (24.9) (52.2)

/a Includes receipts from taxes on imported goods other than customsduties.

Source: Ministry of Finance

3.6 During 1961-1965 revenue from direct taxes increased at a slower

rate than total tax revenue and its share derlined frnm 20 nercent in 1960to 18 percent in 1965. Since 1967 the trend has been reversed. Direct taxrevenue han incrpaRd at an averave rate of 1A nerrnt durinc, 1QA7-1970

while indirect tax revenue has increased at 13 percent per year, and in 1971the nhare of dirert tayen in total tn rpvnnt IQ P-nwapted to rise fn nonrly

23 percent. The growth of direct tax revenue has been achieved despite aredurtinn in rntf"p nnd an inrrpnnp in PyPmnt-ionn nnd ll1nwni-a in 1NA7 nei

partly reflects reduction in tax evasion and partly the growth of incomes. 1/About two thirA of diraet tar ravnna ue A4ad from income taxes. However,

while the revenue from personal income taxation has increased by nearly 20percent a earn durinc 19A7-1970 , fFm 4 nma- tes on lenl antitIea(largely business enterprises) has been roughly stationary. This is a resultnf the onvernment'cz nnlirv nf enrournaing nrIvate anternric with genernm

tax incentives. The total cost in revenue foregone of the various incentiveQchemne -n nopratIon i not knnown with fartnintV hut is Onafimted to he ahout

Drs. 2 billion in 1969.

3.7 The general problems of the tax system as pointed out in the FiveYear Plan, viz. lack of sufficient progressiveness, the existence of numer-ous low yield taxes, the inequitable distribution of tax burdens among incomegroups and the lack of coordination between tax policie 0 ofteCnrlgV-

ernment with that of local authorities, still persist. A major reform of in-

direct taxes imlyn a genra ado *- onJ~ of.S the cval-iea A ed taxf hasee

under consideration for some time but is not likely to be implemented within

1/ The number of income tax returns filed increased from 327,000 tor-,ur u n uunn u---au y -o --- Int-- uu u-

JJJ~'JV illU LAMI! .LLL.;ru delared~ increased.~ by 003 ppeertent UUL.LL6 1 7UI-i7U.

- 40-

the current Plan, partly because of technical difficulties and partly be-cause of its expected impact on prices in a boom situation. There is a

general lack of flexibility on both the taxation and the expenditure sidewhich prevents the budget from being used as a tool for demand management.

Expenditures

3.8 The current expenditures of the Central government increased at an

average of about 14 percent per year during 1961-1966. During 1967-1970the growth rate has been reduced to about 13 percent per year. This is some-

what higher than the Plan target of keeping the rate of increase below 11

percent during 1968-1972. The reorientation of agricultural price supportpolicies (see paras. 2.9 and 2.10) has resulted in reducing the growth of

expenditure on subsidies even though the subsidization of the railways hasbeen increasing (Table 3). The servicing of the public debt has increased

more rapidly than total "ordinary" expenditures. The share of salaries and

pensions has declined slightly between 1960 and 1970 but is expected to in-crease again in 1971 with increases in salaries and pensions of all civil

servants.

Table 3: CENTRAL GOVERNMENT: CURRENT EXPENDITURES(n prce r - nt)

1960 1966 1970/a 1971/b

Salaries and Pensions 48.3 46.6 43.8 45.0

Subsidies 4.7 10.3 6.6 5.7

Transfers to Insurance

Funds, etc. 6.0 7.8 5.5 5.1

Refund of Revenues

Collected for LocalAuthorities, etc. 4.0 8.1 9.9 8.9

Public Debt 4.0 7.8 10.6 11.8

Other 32.9 19.4 23.6 23.4

Total 100.0 100.0 100.0 100.0(in billion drachmas) 914.9) (32.0) (54.6) (59.3)

/a Preliminary/b Budget

.qntirrip! Mnistrv nf Pinan(re

- 41 -

Investment Bud&et

3.9 The rapid increase in the investment budget, with expendituresincreasing by 80 percent between 1967 and 1970, reflects the objective ofthe Plan to double the level of investment by the Central government over1968-72. The sectoral allocation of the public investment program in1968-72 differs significantly from that in 1963-67. (See paras. 1.19 to1.23 and Annex table 2.10) The total expenditure of the investment budgetduring 1968-71 and the pattern of financing it are quite close to the pro-jections made in connection with implementation of the Five-Year Plan (Trble 4).The average annual expenditures in 1968-71 were nearly double the average in1963-67, and a somewhat higher proportion of them was financed by surplusesfrom the regular budget and domestic borrowing, mostly short-term. Theincrease in the share of domestic borrowing was wholly due to increased shareof treasury bills, the share of bonds remaining unchanged. Revenues frominvestment projects financed a significantly smaller proportion of theexpenditures, while the share of foreign borrowing remained roughly unchanged.

Table 4: FINANCING OF PUBLIC INVESTMENT PROGRAM

Percent1963-1967 1968-1971

Actual Planned/a Actual/b

I. Expenditure (billion drachma) 29.9 46.6 47.0

II. Financing 100.0 100.0 100.0

Surplus from Regular Budget 22.4 27.0 27.7

Revenues from Investment projecs 17.1 9.0 7.9

Domestic Borrowing 41.1 46.8 46.2

Bonds 18.1 18.0 17.9Treasury Bills 22.1 28.8 28.3

Foreign Borrowing 19.4 17.1 18.3

/a Five-Year Projections or the Public investment Program7T Budget Forecasts for 1971 and actual figures for 1968, 1969 and 1970

Source: Ministry of Coordination

3.ru Te growtn oL the puvlic iuvestment program nas had ana expald:on-

ary effect on the economy which was desirable in the context of the slackconditions of 1967-1968. it has also been accompanied by an attempt to im-prove the implementation of public sector projects particularly in highwaysand land reclamation and irrigation (See Chapter i Section B). In the pre-sent circumstances when the economy has regained momentum and private con-sumption is showing signs of increasing rapidly, greater caution in theexpansion of aggregate demand and a policy of fiscal restraint may be desir-able. It would be appropriate, therefore, to devote more effort to increas-ing the effectiveness and allocation of public investment expenditures ratherthan to raising its level. From this point of view the fact that the Cen-tral government investment budget expenditure is expected to increase by 8percent in 1971 as compared to an increase of an average rate of increase of19 percent per year during 1968-70 is welcome.

Central Government Budget, 1971

3.11 Like the other budgets of the present government, the 1971 budgetwas presented before the beginning of the fiscal year. No new tax measureshave been announced. Ordinary budget revenues and expenditures are eachexpected to increase by about 11 percent leaving a surplus of Drs. 3.9 billion,as compared to Drs. 2.9 billion in 1970. (See Annex table 5.1) The 13.8

percent increase in expenditure on salaries and pensions reflects an increasein basic salaries of 5 percent, effective January 1, 1971 and an adjustment ofpensions to 80 percent of the salary. Agricultural subsidies are expected to

amount to Drs. 2.2 billion as compared to Drs. 2.6 billion in 1970. Defenceexpenditure is expected to total Drs. 13.6 billion, about one-fourth of total

expenditure. The proportion was 22 percent in 1966.

3.12 The investment budget expenditure is expected to increase to

Drs. 14 billion. Of this nearly one-third would be financed by the surplusfrom the regular budget and almost one-half by domestic borrowing. Foreignborrowing is expected to finance 12.5 percent of the budget as compared to19.7 percent in 1970. This reflects partly the change in the policy on con-tractor's loans, (see para. 4.33) and partly the good prospe cts for public

savings and internal borrowing.

B. Money and Credit

3.13 In addition to the Bank of Greece, the banking system consists oftwo Greek commercial banking groups, one of which handles about two-thirdsof all banking business, and six foreign banks. The specialized credit in-stitutions include a state-owned mortgage bank, three investment banks (of

which one is state-owned), a state agricultural bank, a postal savings bank

and a consignation and loans fund. Of the total credit outstanding in the

economy at the end of 1969. 45 percent was extended by commercial banks.

- 43 -

nearly 22 percent by the Agricultural Bank and about 10 percent by the postalsavings bank. The commercial banks, however, have about 63 percent of totaldeposits of the monetary system and about 80 percent of all private deposits(See Annex table 6.4). A breakdown of total credit between short and longterm is not available. However, the bulk of it is believed to be short-termcredit rolled over for extended periods.

3.14 The bankinv system continues to Dlav an increasinalv imnortantrole in mobilizing and channelling private saving to finance both publicand private investment. With a fairlv high marginal nronensitv to save anda shift in the asset-preferences of private savers away from real estate,and with inr rpaqd ihltic confidPnrp apnPra tPd hv mnnPtarv qtahilI I-y there

is a greater tendency to hold savings in bank deposits. There has, conse-anently hen a rani inrrqqn in hAnk donncits ince 1967 (See Table 5)

Tqhlp % MANFY ANT) CRFDTT In

Growth Rate in Percent1960 1970 1960-67 1967-69 1970

Monetary System Percent of GDP

Money Supply 15.0 19.8 16 6 11Private Deposits /b 13.3 31.5 /d 19 26 16Total Liquidity /c 25.3 41.9 Td 17 16 20

Commercial Banks Billion drachma

Liabilities:

Sight Deposits 3.7 10.6 11 16 6Savings Deposits /e 8.1 45.4 16 27 25Time Deposits /e 2.3 16.4 18 30 30

Assets:

Loans and Advances 12.4 60.3 17 17 20Treasury Bills 2.3 14.8 /d 15 35 32Government Securities 0.2 2.7 Id 70 45 42

T End of year7b Savings, time and other deposits/c Money supply plus private savings deposits/d End November/e Including restricted depositsSource: Bank of Greece

- 44 -

As most saving deposits are withdrawable on demand this has meant a rapidincrease in the liquidity of thp 1~A4~ SlOW 4.~es

in money supply. The high liquidity overhang has not created any problems

ences were to be affected for some reason. The growth in deposits has sus-LAA LWAU SLUWL. UL UALLIM %L_ UA L LU UUL.1 LALC PLAV 4u LIkc PUUA.LL;

sector. 1/

3.15 In the absence of an effective fiscal policy for managing demandUecause ot rigiuties in uuL revenue and expenditure, uIanu uManbageileuL i

carried out mainly by monetary policy. Consumer credit and housing financere relatvely undeveloped and where te private capital market is fairly

inactive. Monetary policy, therefore, tends to affect mainly bank creditfor trade and investment. The system of monetary and credit policy is oper-ated through the decisions of the Currency Committee drawn largely from theI'nistry of Coordination and the Bank of Greece. Le major objective of

the policy is to attain rapid development with monetary stability by influ-eucing uoth t[ e level ana allocation ot creot. This policy is implementedwith much flexibility by direct influence on the lending of the state finan-c.ial institutions and througu a system of credit regulation whUCh remainscomplex despite recent efforts to streamline it. 2/ The basic weapons ofcredit policy are:

(a) Reserve requirements are linked to credits rather than deposits,and vary by the type of credit. Thus the reserve requirement is5 percent of the outstanding value or short-term loans to industryand 35 percent of the amount of credits to domestic and importtrade. Withdrawals from these compulsory deposits are permittedfor certain kinds of loans which it is intended to encourage, e.g.,40 percent of the amount of credit extended to exports can bewithdrawn from the compulsory deposits under reserve requirements.

(b) A specified proportion of sight and savings deposits is requiredto be invested in treasury bills and government bonds.

(c) 15 percent of the total drachma deposits have to be invested inthe long-term financing of specified kinds of "productive" fixedassets, e.g., ships (not applied to foreign banks).

(d) Compulsory loans are required to handicrafts, of 6 percent of theincrease of total drachma deposits since January 1966. The amountsnot used have to be invested in treasury bills or deposited withthe Bank of Greece.

1/ Treasury bills and government bonds accounted for 11.5 percent of theassets of commercial banks at the end of 1960 and 16.1 percent in 1969.

2/ Till 1966 detailed direct controls and quantitative ceilings for each

type of credit were the rule. Such direct regulations, in gnLLCL,are now confined to domestic trade and certain kinds of consumer goodsimports and consumer credit.

- 45 -

(e) Ceilings may be imposed on certain types of credit, e.g., domestictrade, and certain kinds of financing may be prohibited, e.g., ofimported goods except raw materials, machinery and staple foods.

(f) Maximum limits for interest rates are specified for basic cate-

handicrafts and manuf cturing industry and higher ones for imports

only for influencing borrowers decisions. The effective yield toeLIn Lumn fro muo ut L of eduit extenueu, h Lweve,L A Ls e same

once the differential reserve requirements (see (a) above) at the

\ mUmLladl Uas ildy UULti1 acces LU Lile Ballk UL ULeCe LUL fULUb

through (i) rediscount of eligible commercial paper at the bankrate, k.L.L; U1.5UVULIL UL CeLLail kind1s Uf Cr[edit e.g.g, Lo LVUribill;and (iii) overdraft facilities up to fixed limits, with penaltyrates i th limits11 are exceedIed.

J.u Monetary policy has been operatea witn great flexibility and hasmoved in line with changing conditions. It has successfully maintainedmonetary and price stability. in 1967, policy was expansionary with increasedborrowing facilities from the Bank of Greece and a reduction in the rediscount-ing rate to offset the slack in economic activity and tne expansion or long-term financing particularly for housing through specialized credit institu-tions. Since the latter half of 1968, with the recovery of economic activity,the stance of monetary policy gradually changed. The rediscount rate wasraised in three steps to 6.5 percent largely for psychological effect as bankrate changes do not influence the lending rate of the commercial banks inGreece. In fact the lending rates of banks were reduced by lowering of theinterest rate ceilings on bank credit. At the same time a step was takentoward interest rate unification by eliminating a number of special rates.In 1969 monetary policy was adjusted to restrain the growth of "non productive"activities, the interest rates (including commission) on credit to domesticand import trade being raiseq by 1 percent and on loans to house buildingenterprises by 1.5 percent.' Ine compulsory deposits or commercial Dankswith the Bank of Greece against domestic and import trade were raised from30 to 35 percent. The conditions for granting bank credit against collateralof securities were also tightened. The proportion of sight and savingsdeposits required to be invested in treasury bill and government bonds wasraised in steps from 27 percent in 1968 to 34.5 percent in 1970 partly toreauce the liquidity of the commercial banks but mainly to finance theexpanded Public Investment Program.1/

1/ See Annex table 6.7. Credit to agriculture is available at concessionaryrates through the Agriculture Bank. See para. 2.20.

Z/ Bank of Greece, Annual Report for 1969.3/ The regulations for financing export-oriented industry on favorable terms

are described in para. 4.15.

- 40 -

3.17 The system of credit regulation has helped to maintain economicL.IauoLLy aLU L. L%-1& 1 unus LL LUULLIVe LnVes LeIH. nUwever, tIiS has

been largely possible because of rapid growth of total credit based on therapid increase in deposits. The regulations have not resulted in a markedchange in the sectoral distribution of credit except in the share of long-term enuing t inUustry uy cUMMUUrcIai UanKs and a growth in the snare ortourism (Table 6). In fact the proportion of credit of financial institu-tions going into housing in 169 and 1970 was much larger than in 1960 andof credit for exports significantly smaller.

Table 6: STRUCTURE OF CREDIT BY FINANCIAL INSTITUTIONS/a(in percent)

1960 1966 1969 1970

Credit to Private Sector

A. Financial Institutions /b

Agriculture 30.0 24.4 16.3 15.7Manufacturing 41.8 42.8 43.4 43.1

Trade of which: 16.4 17.0 14.4 13.1Domestic and Import 11.3 12.5 11.8 10.9Export 2.4 1.5 1.3 1.4

Housing 5.2 7.4 15.2 15.5Tourism 2.1 3.5 5.1 5.9Other 4.5 4.9 7.5 6.7Total 100.0 100.0 100.0 100.0

B. Commercial Banks

Industry of which 29.1 49.4 50.8 50.9Long-Term 4.8 8.6 8.4 8.3

Handicraft 10.1 8.1 10.5 11.1Trade of which 32.6 27.6 24.5 23.4

Domestic and Import 23.1 21.7 20.5 19.7Export 5.1 2.8 2.4 2.5

Other 8.3 6.3 14.2 14.6Total 100.0 100.0 100.0 100.0

/a End of Year7b Including commercial banksSource: Monthly Statistical Bulletin, Bank of Greece

3.18 In the absence of a developed capital market, credit from financialinstitutions has been increasincly a major source of financing fixed assetformation. Of the total outstanding credit of financial institutions at theand of 1cAQ of nr. 111 hillion, 6 nprent financed fixed canital formation

- 47 -

as compared to 38.5 nercent at the end of 1966. 1/ A 2reater Droportion ofthe new loans for fixed assets went to housing during 1967-1969 than in1961-1966 nartly as a resIt of deliheratp noliev of encouragin2 constructionin 1968 and 1969 to get out of the slack in economic activity (Annex Table6.111. This the Mnrt-crnap Rank financed 16 narrpnt of thp fixed mq.qts finan-ced by financial institutions in 1967-1969 as compared to 9 percent in1961-19AA Of the fixed sner formation in indmry financpd hv trptditfrom financial institutions, the commercial banks financed about half bothdurIng 1961-1966 and 1967-1969.

3.19 The development of an active capital market has ln ensu-'to channel larger proportions of private savings to productive investment, 2/nd to, aof r - des i rabh !-- lt rn-at ive ti saving' depos.ai t- -as a fnorn of no o

savings. This would reduce their effect on total liquidity of the economy,imp,roven the, capit-all st4rucnture of dom-tic enterprise tha4 t reflyf excessive,ly.

on loan capital, and facilitate the development of large modern corporationsmore.. S.L4 i-A F. . U.. ot.. n I.-# . trad-I, -Iorka', fa-1 --n,--A -s.A

.,. 041-e 4A . .4or intrnuatiSonal comet itionL thanfl Lf*ll U- I aI. Mll - -ia -1-c.

managed enterprises.

3.20 A law passed in 1967 aims to stimulate the demand for securities

Lu t hne uistribution o at 'Least 30 percent o1 net prouit as uL vL-dends, after deductions of obligatory reserves, and

(c) a Capital Market Committee to guide the securities market withpower to require audits of companies Listed on the exchange.

There has recently been a great increase in interest in investment insecurities and the index of prices of industrial shares has risen by28 percent in 1968, 86 percent in 1969 and 12 percent in 1970. Anotherindication of increased interest on the part of the public is the highlevel of public sector bond issues. Between 197-69 public issues havetotalled Drs. 7.6 billion and an issue of Drs. 2.2 billion in 1970 wasagain oversubscribed.

1/ Bank of Greece, Report for the Year 1969, page 64.

2/ e.g., "One of the basic problems involved in industrial investmentfinancing is the inadequacy or equity capital that would support therequired borrowing by private enterprise to ensure a satisfactorygrowth in industrial investment...tne solution to this problem liesin the development of the capital market and the spread of stockownership." Annual Report, Bank of Greece, 19066.

3.21 The problem at present appears to be a lack of supply of attrac-tive securities. Between i9ou-o9 total new security issues were Drs. 19.1billion of which 52 percent were government bonds and 36 percent were bondsof public enterprises. Only 3 percent of new issues were private bonds and9 percent were shares. The predominance of public sector issues is not de-cining. In 1967-69 they accounted for 97 percent of value of new issues.The high level of public borrowing is not, however, the main reason forsnortage of private issues. This stems partly from the prevalance of family-owned and managed undertakings which do not wish to dilute control of theirenterprises. They are also often not able to meet public accounting stand-dards which are necessary for enterprises seeking to go "public". In addi-tion, the measures designed to encourage bank participation and financing ofindustry 1/ have hindered the development of a capital market because thtyhave led to the relatively easy availability of long-term loan capital, andthe absorption in bank portfolios of the more attractive securities. Thebanks have tended not to transfer their equity participations to the public.Recent legislation for the creation of mutual funds is aimed at eventualtransfer of the stock portfolio of commercial banks and other specializedcredit institutions to the public. Plans for the establishment of one ormore mutual funds under the aegis of the commercial banks and specializedfinancial institutions are under way. A public issue of share capital bycertain public sector organizations, e.g., the telecommunications organiza-tion is also being considered. This would increase the supply of attractivestocks. However, the development of an active capital market is likely toremain a long-term proposition.

I/ Accoraing to a i9ou aecision or tne Currency CumuwLte vanks are per-

mitted to invest 5 percent of their total deposits in the share capitalof newly established or expanding productive enterprises, also IS per-

cent of total bank deposits are required to be invested in long-term

financing of fixed assets.

- 49 -

IV. BALANCE OF PAYMENTS

A. Foreign Trade and Invisibles

4.1 A main characteristic of Greece's balance of payment is that onlyone-third of merchandise imports are covered by merchandise exports. Two-fifths are covered by invisibles, mainly shipping, tour ism and workers'remittances, and the rest is financed by capital inflow (Table 1). Thetrade deficit reached nearly US$1.1 billion in 1970, an increase of 21 per-cent over the deficit in 1969, which itself was 15 percent larger than 1968.(See Annex table 3.1)

4.2 Recent developments in the current account of the balance of pay-ments, which are expected to persist, indicate a slow change in the composi-tion of imports and exports. The importance of capital goods is increasingin imports, of metal products, textiles, and other manufactured goods inexports and of receipts from workers' remittances and services, mainly tour-ism and shipping (Table 2). Although export of goods and net invisibles mayrise at a slightly faster rate than imports, they are unlikely to rise suf-ficiently to finance the growth of imports and the current account deficitis expected to continue to increase to around US$600 million in the nextfive years (See Chapter V).

4.3 Commodity imports rose by 19 percent in 1970 as compared to anaverage rate of increase of 13 percent during 1960-70, reaching US$1.7billion (See Annex Table 3.6). Imports of capital good!3, which account fornearly one-third of total imports, rose by more than 27 percent. Raw mater-ial and fuel imports which make up a little less than one-third of the total,

Table 1: FINANCING OF IMPORTS(in percent)

lFy6U 1765 19600 197 IToo 1707 1i7/0pIL

Imports of Goods 100 100 100 100 100 100 100Exports of Goods 40.1 32.2 35.0 39.0 37.2 37.0 35.9

Not: Invisibles 39.9 40.1 41.8 40.9 42.0 38.1 39.5Net. Capital Inflows 11.8 24.2 23.4 16.5 22.5 23.4 23.1

Source: Bank of Greece

Table 2: GRWTH AND COMPOSITION OF EXT ERNAL TRADE

(in percent)

Grrowth Rates Cammdityr Corposition

1960-70 1960-65 1965-70 1968 1969 1970 1960 1965 1969 L970

I. Imports 12.6 14.6 10.6 7.5 14.8 18.9 100 o100 10 100

Foods 8.5 11.8 5.3 11. 16.6 8.7 19.5 17.2 14.7 13.5

Raw materials,, fuels 7.5 1.0 3.4 8.8 15.9 16.1 314.4 29.3 29.1 28.3

CLpital goods 19.5 25.0 14.4 7.1 21.3 27.5 16.7 25.6 28.3 30.3

MaMufactured consimner goods 11.9 11.9 11.9 6.5 7.2 20.5 29.3 25.9 27.1 27.5

II. Exports 11.4 9.6 13.1 2.7 14.1 15.4 100 100 100 100

Agricultural products 6.6 8.7 4.5 - 6.4 -0. 4.1 81.4 77.9 58.4 52.7

Tobacco 3.5 9.0 -1.7 -19.5 -U.2 8.3 34.7 33.6 17.7 16.6

M.nerals and ores 9.8 4.5 15.3 38.6 14.7 17.4 8.6 6.8 7.4 7.5

Manufactured and petroleunproducts 36.5 27.5 46.5 h04 50.7 27.7 4.9 10.2 33.4 37.0

Textiles 29.5 23.5 36.0 27.8 33.2 33.8 1.2 2.2 4.8 5.6

Aluidim - - - 22.4 19.7 20.6 - - 6.8 7.1

Source: Bank of Greece

- 51 -

by about 21 percent and food by about 9 percent. 1/ The increasing capital.UUU LI0 IdW IUat tld- 11LtL ALCUL LI AdL .1UL=CieU LLL -L1%UDn LL..A& JL

vestment and production.

4.4 In the last years, the imported capital goods were equivalentto about 60 percent oL investmeL u unachinery and e4uJ.pmNL u u percentof gross fixed investment in the economy. The imports of raw materials andfuels were equivalent to about one-tuira or inaustrial output (ee annexTable 3.9). Although there was some decline in the import content of indus-trial production, significant import substitution in investment guoUs aU raw

materials is not expected in the next years. Imports of meat and dairy pro-Uucts, which increased by about 17 percent and amounted to about US$122 mil-

lion in 1970 are also not expected to be replaced by local production by172 as programed in the Five ear Plan, as progress in this fiela was slow-

er than envisaged.

4.5 Since 1962, when Greece has become an associated member of theEuropean Economic Community, the share or imports from EEC countries has

increased slightly, and amounted to about 43 percent in 1970. Germany (FGR)

is the most important trade partner providing about 20 percent or imports,followed by the USA whose share has decreased to 15 percent. The share ofimports from USSR and Eastern Europe has declined to about 6 percent in spiteof an agreement with the USSR providing a 50 percent tariff reduction forspecified goods (See Annex Table 3.7). Switch trade via Yugoslavia and other

bilateral agreement trade partners with high surplus clearing balances hasbeen quite active.

4.6 Under the treaty of Athens, tariffs on goods imported from the EECand not produced in Greece have been reduced by 70 percent (February 1, 1971).

A further 10 percent reduction will take place in 1972, and by 1974 tariffs

on these goods will be abolished. On goods produced locally, tariffs on im-ports from the EEC have been cut by 20 percent (May 1, 1970). Tariffs willbe reduced by another 10 percent in 1972 and will be completely abolished in1984 (See Annex Table 3.10).

4.7 Despite tariff reductions many Greek industries enjoy significanttariff protection. The ratio of import duties collected to the value ofgoods taxed averaged about 15 percent in 1970 compared with 17 percent in1969 and in 1968. However, if consumption and turnover taxes on importedgoods are included the ratio was nearly 29 percent in 1970. Comodity cate-gories most heavily charged were: beverages and tobacco, oils and fats,fuels, food and live animals and several manufactured articles (See AnnexTable 3.11).

1/ Imports of machinery (US$397 million) increased by 27 percent andimports of iron and steel (US$126 million) increased by over 42 percent,partly due to international price increases.

7 52 -

4.8 In addition, advance deposits of up to 140 percent of c.i.f. valueare required for many goods.* The rates of deois ob mae inavacare gradually being reduced in accordance with the EEC time schedule. Fur-thermore, special licenses are required for imports like textiles, uoo

biles, luxury goods, several foodstuff, certain machinery and spare parts.

4.9 Total imports are expected to continue to rise rapidly if theecno-..,,., grows at a..- rate ofn.4 abu7 pecn pe a-nnuma.. For.. 1071,anipr

growth rate of about 14 percent is forecast, though capital goods might in-

years, total imports are expected to increase at the rate of 12 percent;conssumer goodsC at 9 pecenCUt, raw tmaterials.1 andt intermediCtSateC goodst. k-J 11j

cent and capital goods by 12 percent (See Chapter V).

4.10 Commodity exports increased by 15 percent in 1970, as compared toai gi nCeg r WC tL W L L L 11 II pJ L LInL UUL i IL 7U I , l17U 6LVI- LU U yuIL

million (See Annex table 3.6). The ratio of commodity exports to GDP re-ma-iueu relatively "Low at 0' percent. Tne comouity composition of exputshas become more diversified in the 1960's. Agricultural exports constitutedoVeL 0 peLCenL UL LULd expULL i1 I1W0, 'uUL Lislb rIdLe ULlILU LI) JJ rL

cent in 1970. This successful diversification of the commodity compositionreflects partly a uuauuing of the industral vase and partly a greater

export orientation in industry.

4.11 Agriculture exports increased by about 4 percent in 1970, comparedwith an average growth of nearly 7 percent in the last decade. Ln 17V, goodexport performance have been achieved by wines (+70 percent), citrus fruits(+29 percent), early vegetables and fruit preserves (+41 percent), frultjuices (+97 percent), cereals (+59 percent). The 8 percent increase of to-bacco exports resulted partly from a special bilateral agreement with theUSSR. There was a decline of exports of other important agricultural pro-ducts, such as currants, raisins, cotton, olive oil, fresh fruits, hides.Cotton exports dropped in 1970 partly due to a bad cotton crop and partlydue to domestic processing into yarn, some of which was exported in turn.The share of tobacco has declined from 35 percent of total exports in 1960to 17 percent in 1970 (Taole 2).

4.12 Non-agricultural exports increased by over 30 percent in 19/0 andby more than 40 percent in 1969. This compares with an average growth rateof 22 percent in the last decade. There were large increases in mineral andore exports (mainly magnesite, zinc, lead and nickel ore). Exports of manu-factured products increased by 28 percent in 1970 and accounted for 37 per-cent of total exports. There were large increases in exports of textiles(34 percent, mainly cotton yarn), chemicals including fertilizer (29 percent),antiknock compound (27 percent), aluminum (21 percent), nickel (50 percent),s?teel plates (66 percent), other metals (47 percent), machinery (42 percent),electrical appliances (40 percent) and leather articles (213 percent). Theexport of petroleum products, cement, and furs declined.

- Ii -

4-.13 The expnrt performnnance of mamn-acturedi nrntiiirt-QIr lp.q.q imnrp.q-sive when goods like aluminum, nickel, other metals, antiknock compounds andrhamicals a e el4m4natn Aa thea teama aonunted for more than half nf

the manufactured goods exports and are in some cases subject to large price

For the long-term development of exports, it might be necessary to exploitthe so-cal1led "market inters -4-"s -1here a small cou"tty like Greece canhope to compete successfully with large industrial countries. Greek manu-

f-+-.r_ n s4- n nn +- -_ 14 - 4. Ita# , .41 n-_-4-11 !.nt 4 a niA,,, In-- ~ o s ecit.ali z i a. few ta,,sJ. - - -"' ---

special equipment or labor intensive components.

4.14 About 40 percent of the exports went to the EEC countries, mainly.~ J~. I . r< 1X%JJ , 17 1- ILA%-= 21LU .CtG.Ly . 111ULLUL I'L L. ~ L;WLL L . = C PUJL LCu L.%J -I t

countries, 16 percent to USA and 17 percent to USSR and other East Bloc9.HL LH 17U7, LIIC L;1J2% &LdLa Was lii LUL li som agiLULULI gUd,

minerals and ores, as well as some manufactured goods (See Annex Tables 3.7a d .J ) o .

J. 1 C A I- - -~ -~ -

L. IJ A uroad system of export incentives nas been Uevtuped to ILCLeiSe

exports of manufactured goods. Raw materials, package materials and capitalgoods needed for production for export are duty free; tax allowances and taxexemption for 5-10 years; foreign investors get preferential tax treatment;the ceiling interest rate for export credits is only 6.5 percent and a semi-public export insurance company has a government guarantee of Drs. 150 mil-lion. Furthermore, since 1971, up to 70 percent of the credits needed inthe export-oriented industries have been guaranteed by the government; inter-est rates for investment in export-oriented industries are subsidized by 4percentage points (i.e., interest plus commission is only 5 percent insteadof 9 percent); however, the credit amount is dependent upon the value addedand the export value and furthermore, this incentive wLll be given to loanscontracted before 1974 and will be abolished gradually by 1984. 1/ The com-mercial banks are required to finance these favorable credits to the extentof one-half percent of their total lending capacity (with the exception ofsome low interest rate credits), plus an additional 1 percent of their domes-tic trade credits. It is estimated that this should mobilize about 350-400million drachmas per year to provide cheap credit to export-oriented indus-tries. This "internal transfer", will be therefore expensive for the commer-cial banks. However, the new system allows more flexibility compared to theformer subsidized interest rate system financed by the budget. 2/

1! Preconditions for these favorable credits are: (a) Investment in manu-facturing and handicrafts; (b) Value added at least 25 percent of pro-duction cost; (c) Export must go to free foreign exchange countries(tee., not to East Bloc countries); (d) at least 600,000 Drachmas perannum must be exported. If the value added is 25-30 percent thesubsidized credit is equivalent to 3 times value of export, if 40 or50 percent the credit is 4 or 5 times value of exiort and if the valueadded is 60 percent or more the credit is 6 times the value of export.

2/ The former credit regulations imposed a ceiling on the total domestictrade credits. See para. 3.15.

- 54 -

4.16 Some aRricultural producers and many industrial entrepreneurs arenow much more export-minded and EEC-oriented than a couple of years ago.New investments and an increasin2 number of new. export-oriented manufartur-ing companies indicate that this trend might continue. The Greek Chamberof Commerce established an Export Promotion Board in 1970 to serve the in-terests of the consumer good industries, and recently started marketingseminars- market information services. Rales nrnmntion exhihirions ahroad

and trade centers (New York, London, Paris, Brussels, Frankfurt). A startiq hPina made to establish nualltv controls and to undertake market resparrh

abroad. Both are necessary for the expansion of exports of diversified manu-fatired nrnducts.

4._17 Tn 1971, a r-isep in totanl eponnrts of goods of 15-9n perncent Is ev-pected, and the preliminary official long-term projection indicates an in-ee of 12 percent per annum in the nert 7 yars. The total groath oF

agricultural products is estimated to be over 4 percent (See para. 2.24).Prospects for exports of minerals and ores continue to be good adIdsraexports are projected to increase by nearly 18 percent per year (see para.2. - 55 a, -Ac h..5CJL apter /

Tow4ja4klan

A.1 The 4ne Inflo 4 4n-p-nonA h.- 91 ----- t 4n 1070 Acm-pared to an average increase during the 1960's of over 12 percent per year.koC dU .L JJ nu anual ivw L ae Ut I goL L L L pcent oc m uL ei d Lfor aenAL

seven years. The total receipts from invisibles increased by about 20 percentLn 1D/ ecIhLing dUUL U'9 1LJ ILL.L±.LUt \Oee iineA La1vic LJL IbC VULL.AW VL

invisibles amounted to US$270 million, of which about US$56 million were forinterest, dividends and pUoLiL LLaLe.

Table 3: ANNUAL GROWTH RATES OF INVISIBLES(in percent)

1960-70 1960-65 1965-70 1968 1969 1970

Transportation receipts,gross 13.4 16.4 10.5 13.3 -0.3 11.4

Tourism receipts, gross 14.2 15.9 12.5 -5.4 24.3 29.5Interest payments, gross 30.0 27.0 33.5 22.2 26.9 43.0Services. net 10.9 11.4 9.9 17.4 -6.1 23.1

Workers' remittances 14.3 18.0 10.7 3.1 15.7 23.8TnvIsihlp- net 12-5 14.7 10.3 10-4 4-0 2LS

Source: Bank of Greece

- 55 -

Tourism

4.19 At the moment, Greece handles only 2.8 percent of total Mediter-ranean tourism but it has a large potential. The number of foreign touristshas recovered completely from the setback in 1967 and 1968 and amounted toover 1.2 million in 1970. U The increase of 19 percent in 1970 and of over14 percent per annum during the 1960's reflects the activity in this sector.Gross tourism receipts increased by nearly 30 percent amounting, to overUS$190 million in 1970 (US$138 million net), i.e., aboul: one-third more thanthe previous peak figure in 1966 (See Annex table 3.2). The tourism earningsare expected to continue rising rapidly. Advance bookings indicate a growthof about 25 percent in 1971 and an annual increase of about 18 percent isexpected during the next seven years.

4.20 The limiting factor on tourism has been the shortage of hotelfacilities, in spite of a 50 percent increase in beds available during thelast four years. Construction of new tourist accommodaltion has been heavyand continued even during the recession, but new hotels have been oftenfully booked before completion. Most private tourism activities are devel-oping in well known areas like Athens, Corfu, Rhodes and to a smaller extentalso in the Peloponnese. However, tourism will increase also in other areassuch as Crete and the Chalkidi peninsula after completion of new highwaysand the international airport in Heraklion (Crete). To encourage privatetourism developments .in new areas cheap credits and special tax exemptionhave been provided,2/ but consideration is now being given to the publicHellenic Industrial Development Bank (HIDB) financing tourism in new areas.Furthermore, the National Tourist Organization is to organize tourism inselected remote areas. through infrastructure development. zonina. proposalsfor facilities, quality control, etc. More intensive training of hotel staffand management in the provinces is also required.

Shiovnins

4.21 The shipping industry has continued to boom. Gross receipts fromtransportation rose by over 11 percent in 1970 and reached about US$270 mil-lion (nearly US$230 million net) (See Annex table 3.2). Additional fundsof shipowners and seamen were transferred to Gseece for investment or heldas foreign exchange deposits with Greek banks.- / The Government has beenencouraging such deposits by giving high rates of interest and allowing con-vertibility. The prospects for shippine is favorable; the authorities esti-mate an annual increase of nearly 11 percent during the next seven years.

1/ Including excursionists and Greek tourists living abroad, the arrivalswere 1.6 million in 1970. See Annex table 8.12.

2/ The loans for develooinv new areas have the following terms: maturity13-18 years (instead of 10-12 years) of which 5 years grace; interest7.5 nercent during grace neriod and afterwards 7.0 prrnt (instead of8-10 percent). Up to 80 percent of the total cost, including cost ofland, can he financed hv these rheap credits-

3/ See Annex table 3.3, item "other private capital" (II 1.b) and "otherbank dPnnRt-q" (TT 2-h)-

- 56 -

4.22 Conditions for the shipping industry in Greece have Rreatly im-proved due to the tax exemption and other incentives, the provision of betterinternational communications facilities, the availability of bank credits.the establishmene and enlargement of shipyards and the training of new crews.The tonnage of Greek-owned ships increased 18 percent in 1970 to about 32million; another 15 million tons are on order with deliveries scheduled dur-ing the next years. 1/ However, more than 50 percent of the total Greekowners' tonnage is sTill sailing under foreign flags, but nearly 60 percentof the total increase of Greek-owned tonnage in the last two years went tothe Greek merchant fleet.

Workers abroad

4.23 Due to large scale emigration of Greek workers to Western Europein the last few vears- emigrants' and workers' remittances increased by 24percent (workers' remittances alone by 29 percent) in 1970 and mounted toover USS34O million- the eauIvalent of over half of the total merchandi7eexports (See Annex table 3.2). In addition to this income transfer, therewere transfers of emigrants and workers abroad for financing real estate orother investments in Greece and for foreign exchange deposits with Greekbanks. Tt i. also estimated that Creek workers have accumulated savings of

over DM 1 billion in Germany. Receipts from emigrants' and workers' remit-tnesanre exnected to riseabhout ?R narnont in 1971 hut the average annualincrease is officially expected to be about 9 percent during 1971-77 as com-n,irofl fn n a,-at-

1n - nF 1IA ,-rr arn t A ii- na fli 1QA Q ~le~ (r-M.Tt-' n inA y.,

much on the employment situation in Germany, where about 90 percent of allGreek wrkers a'road wer-e employed in 1970 (See Annex .LshlI 1 1 an 1 5)

1968 due to the recession in Germany, more than 60,000 workers emigrated tor.~~~~~~~.~ .z. .cL~ L~ n,, ~ .- .- ~. 4.4. 10-71 ,~ 1) rC% (nr)

UGLUldlyi H10 cLlU ILL 1/U inU, 99L LLIn U19LLi0an att UL IJIb n oVfL Ju t .k

workers were employed in Germany. About 95 percent of the emigrating workersnave been unskilled, about 4u percent women anu nearLy JU petent came fUm

Northern Greece (Macedonia). During the 1960's more than 540,000 workersmoved to Western Europe, of which about 40,0UU went to GumLn61y. tWUUL260,000 workers are estimated to have returned. An additional emigration ofabout 30,000 workers is expected in i7 but it is consinerea thac Lue numuer

of workers, willing to work abroad, could easily be increased if the labordemand in Germany should rise. More than 80,000 unskilled Greek workers haveregistered in waiting lists for temporary emigration. (See Annex table 1.5)

4.25 In general, the Greek authorities have not restricted emigrationnor regarded it as a drain of skills. Greek industries have not been unfav-orably affected by the emigration of labor; industrial on-the-job trainingabroad is seen as an advantage for the future manpower situation. An analy-sis of Greek workers in Germany indicates that most male workers have been

1/ Theg ieredant tons ,ndoer Gre flawit inroe to 2r1e r tes1 of 100

registered tons or above with 13.6 million registered tons in 1970,WI11 I- J"LaceL -3 ~ L. rVL411 1.1,L I AL

- 57 -

promoted to a semi-skilled professional position during their average stayabroad of about 4-7 years. Furthermore, most emigrated workers have beenworking in large size companies mainly in the iron and metal processingindustries (machinery, automobile, electrical equipment) and other manufac-turing industries like textiles and chemicals (See Annex tables 1.6 and 1.7).Despite the fact that up to now, only a few skilled and semi-skilled workershave returned, Greek industrial labor abroad is a reserve of manpower whichmay be very valuable for future economic development.

B. Capital Movements

4.26 Total net inflow of canital increased by about 17 percent andamounted to US$393 million in 1970. 1/ The average annual growth rate since1965 was nearly 10 nercpnt. Howpver- th incraqe of long-tprm canftalaveraged less than 4 percent and its share of total net: inflow amounted toonly 58 nerent in 1970 comnarpd with 76 nprrpnt in 1f. 2/ AlIn- the nrn-

portion of total long-term capital inflow going to the private sector ascompared to the public qectnr dprlined from 76 ncrrpnt in 1965 to 55 nprnpntin 1969 and 62 percent in 1970. (See Anne- table 3.3)

4.27 Private long-term capital inflows, which declined steadily in theIst Fanr ears, partly mc a srolt of nolit-cal factors, increased by 38

percent amounting to US$142 million net in 1970, i.e., about the same levelas n 19 65. This increase mainly resulted from a large increase of venture

capital inflow, amounting to US$85 million gross and US$53 million net.

4.28 The legal framework for attracting foreign investments is formu-

rapidly from US$54 million in 1965 to US$240 million in 1969 but declined toUy lV9 HLL1.U U 1 / I d LL 1LL LLa UL aj9LUVHA WtLIZ L.LrLL U* ./ _) .Lya few approved applications materialized in the period 1966-69, and even in*.07n, the relzation rO.LL .ate, was olyUJ) oneJL*C l L*L A oauthrz AILt4 oL.-W.tCt

amount is still much lower than in 1965 when two big private investmentswer I Ok _LY L _ u4L ML~. I

1/ This includes grants and the estimated value of machinery imported underthe foreign investment law. See Annex table 3.3

2/ The ratios in 1968 and 1969 were 53 percent and 55. percent, respectively.

3/ Excluding the two big package projects of the Onassis and Niarchosagreements amounting to US$760 million in 1970 (see para. 4.32).

4/ The Pappas Oil Refinery and Aluminium de Grece projects implied totalL jIkL . ALL UWO UL U U ML.LA..LUIL LUAU UO. il $U 11AA-L.LLLLL 11 = LLL CULD

See Annex table 3.4.

- 58 -

4.29 A time-lag in the implementation of investments is, of course, tobe expected, but it does not fully explain the large discrepancy betweenapprovals and realization. Many of the approvals in 1968 and 1969 are notexpected to materialize, partly due to uncertainties in the climate for in-vestment. More important, some applications were imprecise; the administra-tive procedures are lengthy and in some cases the limits on repatriation ofprofits and capital acted as a disincentive.

4.30 The Bank of Greece estimates gross capital inflow imported underthe investment Law 2687 at US$50 million in 1970, compared with US$26 millionin 1969 and US$72 million in 1965. The net amount was US$25 million in 1970,US$4 million in 1969 and US$70 million in 1965. The net inflow of otherventure capital increased from US$15 million in 1965 to US$27 million in 1970.Other long-term capital, mainly for real estate, increased continuously tromUS$58 million in 1965 to US$89 million in 1970. (See Annex table 3.3).

4.31 The net inflow of private short- and medium-term capital such asbank loans, suppliers' credits and deposits increased from US$42 million In1965 to US$73 million in 1969 and US$135 million in 1970. The governmenthas been encouraging foreign exchange deposits with Greek banks giving highrates of interest and guaranteeing convertibility. The total outstandingsuppliers' credit, including the suppliers' credits to the public sector,increased to US$517 million in 1970 compared to US$434 million in 1969. Theannual increase of new suppliers' credits (net) since 1965 has averaged 17percent. About one-third of the outstanding credits have a maturity of morethan 36 months and about 30 percent of the new credits had a medium termmaturity compared with only 25 percent in 1965 (See Annex table 3.5). Re-financing of these credits is considered to be relatively easy in an expand-ing exonomy.

4.32 At present, there is little prospect of a major increase in thevolume of foreign private investment in spite of an expanding domestic market,access to EEC, geographical proximity to Middle East countries and availabil-ity of labor at relatively low wages. Recently negotiated agreements withtwo Greek shipowners for two large investment packages (Onassis about US$600million, Niarchos about US$200 million), even if realized, are long-term un-dertakings and the capital inflow is unlikely to be large in the next twoyears. 1/ Even if substantial parts of these deals materialize, annual netdirect investments are unlikely to exceed US$150-175 million in the nextfive years. Other private long-term capital might be about US$120-150 mil-lion and medium- and short-term capital inflows (including suppliers' creditsand foreign currency deposits of Greek workers abroad) may reach US$150-160million-by 1976.

1/ The nackage investments un to 1976 are in refineries, petro-chemicalindustries, aluminum, magnesia, steel, ship engines, shipyards, andnower plant.

- 59 -

External Borrowing of the Public Sector

4.33 External borrowing of the public sector was heavy in the lastthree years (See Annex table 3.3). Since the military coup in 1967, Greecehas had reduced access to long-term concessionary loans. The EEC did notrenew the capital aid agreement of 1962 and the European Investment Bankstopped lending the uncontracted amount (US$55 million) of the originallycommitted capital aid (1963-67: US$125 million). Bilateral lending byEEC members has continued. However, most of it represents disbursements ofcommitments pledged before the 1967 coup. New commitments for concessionaryloans have only been made by France. Most recent loans to the CentralGovernment, public enterprises and the Bank of Greece, have been made oncommercial terms and with a medium-term maturity.-Y Long-term capitalinflow to the public sector amounted to US$86 million net in 1970, and theaverage increase since 1965 was about 13 percent per annum. However,83 percent of the gross inflow of long-term capital, amounting to US$124million in 1970, were commercial loans, compared with 72 percent in 1969and 20 percent in 1966. The inflow of so-called contractor's loans especi-ally increased substantially and reached about US$80 million. Contractor'sloans are channeled through the private sector to public investments. Since1968, a clause has been included in many public bids making it a conditionof the bid that the equivalent to 70 percent of the project's cost would befinanced abroad. The authorities realized that these loans are an expensivemethod of financing and the practice of financing through Greek or foreigncontractors was stopped at the end of 1970. It is intended to be replacedby direct borrowing abroad by public agencies and the State./

4.34 In 1970, short- and medium-term net capital inflow to the publicsector declined to US$28 million partly due to a substantial decline of thesuppliers' credits to the public sector and partly due to a reduction ofthe Bank of Greece's and other State banks' medium-term borrowing and anincrease of the repayments of this borrowing. The Bank of Greece used thesecommercial loans which amounted to US$54 million in 1969 and US$40 millionin 1970 (gross), for balance of payments purposes. However, in spite ofallocation of SDRs, the reserves declined from US$317 million at the endof 1969 to US$310 million at the end of 1970, equivalent to 2 months imports.They are now only slightly higher than in 1963 (US$293 million). but in themeantime, the imports have more than doubled. (See Annex table 3.3).

1/ For example, by Commodity Credit Corporation (US$17 million), FirstNational City Hank (USI1U million).

2/ In 1971, the Bank of Greece was granted a $60 million loan by a syndicateof 10 U.N. banks, headed by the First National City Bank. The six-yearloan will be used to bolster the foreign exchange reserves and to re-finance external loans. Furthermore, the Hellenic Industrial Develop-ment Bank signed agreements with the British Industrial InvestmentCompany Brandts and Sons and the French Banque de Paris et des PayPasfor lines of credit amounting to $180 million and $70 million, respec-tively. The 10-15 years loans at current rates of interest in suppliercountries, will be used to grant loans to private enterprise for thepurchase of equipment from West European countries,

- 60 -

4.35 Besides covering the expected current account deficit of aboutUS$550-600 million, Greece has to finance annual amortization payments onits outstanding medium- and long-term public debt, averaging over US$85 mil-lion in the next 5 years and reaching a peak of over US$122 million in 1973.Given the expected private capital net inflow (see para. 4.32) the grossexternal borrowl5g requirement of the public sector would be about US$300million a year.-V Taking into account the required additional borrowing ofthe public sector, ghe debt service ratio would rise to about 11-15 percentin the next years.Y1 In these circumstances, it will be of major importanceto improve the composition of public external borrowing and to regain accessto external sources of long-term loans.

1/ Gross inflow to the public sector was about US$180 million in 1970.See Annex table 3.3.

2/ The debt service ratio was about 5 percent in 1970. See para. 1.15.

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V. ECONOMIC PROSPECTS

5.1 Prospects for continued rapid growth of the Greek economy for thenext five years are good, given domestic and international stability. Themajor favorable factors to economic development are (a) the emergence ofdynamic Greek entrepreneurs mainly in industry, and also in some farmingventures; (b) the high rate of private investment and the gradual shift ofinvestment away from dwellings towards "productive" investment; (c) the highmarginal rate of domestic savings (d) domestic price stability: and (e) thefavorable trade relations with the EEC under the Treaty of Athens, underwhich the domestic market is still protected from competition from the EEC,while Greek manufacturers have free access to the Common Market.

5.2 The emphasis on mobilization of domestic savings and their chan-nelization to productive investment has to continue. There is still scopefor improving the rate of domestic savings so that the growth of investmentreauired for rapid development does not result in an excessively large gapbetween savings and investment reflected in a too rapid increase in thecurrent account deficit.

5.3 It IR alqo necessary to imnrnve the Institutional framework- inparticular the administrative efficiency in project preparation and imple-mentaton in thp nithlic qector Tt has hn nninted out that nrnorPan in

this sphere has not been so rapid as was foreseen in the Five Year Planand there i- much acomp to inevann the officincy nf vuhlic Investmentexpenditures (Chapter I Section B). Institutional and administrative defi-rene4 oa ol In tha Inn n harnma 4irara4nol" 4imn-rtant -rak gan

sustained economic growth.

5.4 The growing balance of payment deficit could have an unfavorableI Fpa-ct on d evel- o pmenit in- th ,e n exIt Fv year 4f su4 ~.C 4, ows, of--

vate capital and long-term capital to the public sector are not forthcoming.

sity of the economy particularly for investment and intermediate goods (and*~~~~~~ Ut kt~L .iLOLufj .?LL 6i.uj "0 , 0 U%.L1 A 0 C IO ct 111 CZ tILU UtIV C & 6 tat. L. & ha. A UIL WA.

imports are financed by capital inflows and invisible earnings makes medium0.UAL OLU t A. iL CAJLLIIA. ... ACVCLJ

9&ICL t OJ tC -L O W,L OCX i.JyCUU LL L WIL L&L C LA.-±

ance of payments. This is even more so because of the large amounts ofe pe... O RU) t itUCA.A a, U'LIA A LW .16 LiA a L .t, UAhI L UlaI.LL . O UA. Lr A. 11 AL

recession that marked the initial years of the present government. ThisUULLUWiang hOD ACL a lCgacy L1n UCUL CVt r C payaCL c W ILLA.AL L&LUL LAI Uan Icueof payments picture for the next few years.

- 62 -

Table 1: BALANCE OF PAYMENTS PROJECTION

Percentage growth Rate Value (Million dollars)

1960-70 1971-77 1977

Exports of goods 11.4 12.1 1,360

Agricultural 6.6 8.3 430/bIndustrial 26.0 17.8 712--

Invisible earnings 13.2 12.9 2200

Travel 14.2 17.7 600Emigrant remittances 14.3 8.9 620Transportation 13.4 10.7 550

Invisible payments 15.0 12.3 600

Profits, interest,Dividends 30.0 15.3 160

Imports of Goods 12.6 11.5 3,530

Consumer Goods 11.0 9.0 1,100Intermediate Goods 7.5 13.2 1,280

Capital Goods 19.5 12.4 1,070

Current Account Balance - - 570

la Current prices./b Includes US$170 million expected from projects under Onassis and Niarchos

agreements.~01Source: Center for Development Research and Planning, for 1971-77 and Bank

LLJ. ~ LUJAU IX Y . A. -e Z

. re]iinary ULLIcial estimats u Lh U al.= UL payLmLuLe U.u Un

a growth rate of GNP of 7 percent per year and taking account of past trendsand expected future developments abroad and in the ecuuumy are summarizeu in

Table 1. The rather optimistic prospects for agricultural exports are basedon a very large anticipated increase in ftuIts, vegetables and juices. Thegrowth of industrial exports would be slower than forecast if, as appearslikely, the implementation of the Onassis-Niarchos package investments donot proceed on schedule. On the other hand earnings from invisibles appearto be estimated conservatively. In particular the emigrants' and workers' re-mittances may be expected to increase more rapidly than forecast if there isno recession in Western Europe and tourism receipts may do the same. The

import estimates implying an overall import elasticity of about 1.3 are notunreasonable. It is assumed that there would be significant progress inimport substitution in consumer goods (meat) and some investment goods. All

- 63 -

together, the estimated current account deficit is anticipated to rise toT.~ TO6C'7A - I I ±Ui IZI n .1 n IL LU /1 art'±~ to at-'"jz at thata 'eve'

5.6 Ine financing of a current account deficit of LuI magItuUe wouUrequire a rapid increase in the inflow of long-term private capital and a pol-icy of restraint in external short and medium term borrowing Dy the publicsector. There are indications that private capital inflows have recoveredfrom the slowdown following the military coup. Ine government is also De-coming increasingly aware of the problems that could result if external loansare incurred at high cost and with excessively short maturity. Ine declaredintention not to continue with contractor financing is a step in thisdirection. Also with the improvement in the international capital marketsituation and the good performance of the Greek economy- there has been in-creased availability of medium term funds to the public: sector. Consequent-ly, the balance of payments situation in the next few years would appear tobe manageable if the current favorable trends in domestic savings, exportperformance, tourism, remittances and the pattern of external capital in-flows continue and a cautious external borrowing policy, is followed.

1/Appendix: AGRICULTURAL SUPPORTS AND SUBSIDIES

1. In 1970 the total cost of support to agriculture, as shown in thebudget, was 2,258 million Drs. This compares with an expenditure of 4,689million Drs in 1967. The very high figure of expenditure in the latter yearis largely accounted for by losses incurred by Government in handling andexporting surolus oroduce.- mainly wheat and tobarco. These amounted to1,935 million Drs. In addition, a debit item of 200 million Drs for debtsettlement was charged to that year. Thus, some 84% of the reduction was

effected by the virtual elimination of these expenditures and about 16% byreduction of the opnprnl lvPl of Qihidipq for nripe And inrnme qnnnorts

and procurement of the means of production. The major change was effectedbv diAnnQing of the ournluso enlarging the rnl nf tho nrivate ector inhandling and marketing, and discouraging production of surplus commoditieshv the nvica msphnniam n"A ntuns annnVlO In tha tcaO nf f-nhnf-pno A nntturnl

reduction of output due to weather, particularly in the very poor 1968 har-vest season, aided the process considerably.

2. Minmu intrvetio prices,UUL LI4J*5. at L U fjVCUSLSU whic fltUvernment mgt pi ucase,

and income transfers were substituted for direct subsidization of prices.Th ltrasfr are intended~C U.UCLuA as a teorLjJary expedientU toJ prot-ect .Ct.. e poUorer

producers in particular against an abrupt reduction of income, but sincetheyw are reTa -eA Oes s wl.n a .AUCtl k . m n - --.. A4444 .16LIy LC GLU LU LtlC VUluL U pLUU L-LU, L11hy aLe mUnCWhafL UALLL.uL.Lto distinguish from price supports. In their present form they may well

Cra, --------------

JoLI W LLA LIA~C LL CCLLLLC UAG All 8UIp.LC . AG HHCIULWI-..tSb Llu ruuu"-L

WL~~LdL5 tUt 11ecaneo policy in 14967, the previous ~sstem Ut-wea

purchases by Government at "differential prices" was abandoned. Trade inWheaL dilu UaLey Was LakeL UVeL V L 6 itC.Ly UY LILU JJL.LVdLC bCULUL. I1IV

extent of this change is illustrated by the following figures of purchasesL.. trVTR,%n - I-L1k-1 C C n-UY L%UW U Oll UCILL UL.L.OL GUve i nt.LL

ULraiLL lULIaC b IXY PLUr 000 LULos

1966 1967 1968 1969 1970

Wheat 867.1 471.4 19.7 38.4 73.7

Barley 147.8 265.9 63.1 7.3 180.5

Maize 13.1 18.3 22.4 50.0 45.5

Source: Central Union of Agricultural Cooperatives (KYDEP)

1/ See Annex table 7.9

-2-

4 rurcnases continueU on a reduceU scale, iii couormity with Govern-ment's policy of offering feed grains, including surplus wheat, to livestockproducers at concessive prices. Intervention prices for soft and hard wheaL,barley and maize were fixed at levels designed to encourage production offeed grains and hard weat, which Hab export possibliites, at tne expensuof soft wheat. Production of hybrid maize as a double crop was further en-couraged by a direct subsidy of 1,000 Drs per ha, but the area subsidy forlucerne was withdrawn in view of the profitability and rapid expansion ofthe crop.

Livestock and Milk

-1. The subsidy for raising young bulls or steers to weights or 3UUkg or more before slaughter, and the similar subsidy for pigs raised to90-110 kg liveweight, were withdrawn in 1970 on the grounds that they hadfulfilled their educational purpose, and general subsidies for purchasedbreeding stock were restricted to imported bred heifers or high quality.New subsidies on the means of production were introduced to encourage theestablishment of approved livestock units. In addition, it is intended toapply the system of intervention prices to livestock products and set up anorganization for the purpose, but this cannot be done until adequate coldstorage facilities are available. In effect, the system already operatesin the case of poultry meat. The Union of Poultry Cooperatives buys whenthe price falls to 15 Drs/kg and Government has undertaken to make good anylosses on these transactions.

6. There is an "indicative" price for cow's milk delivered to cooper-ative dairy plants. This is based on the Common Market price and it is, atpresent, 2.90 Drs/kg at 3.7 percent butterfat. To maintain this level, themilk price is subsidized by Government in the case of dairies which do nothave large market for liquid milk and must depend mainly on cheese making.The maximum subsidy is 0.70 Drs/kg for the first three years of operationand 0.40 Drs/kg in the next three years, and an additional grant of 0.15Drs/kg is given to encourage deliveries of milk of higher quality. It isexpected that economic operation will have been achieved after six years,when the subsidy may be discontinued. Twenty-five cooperative dairies arenow operating and about half of them are still within the subsidy scheme.Provision has also been included in the 1970 budget for a subsidy of 1.80Drs/kg on milk used in the manufacture of condensed milk, but the proposedfactory at Thessaloniki has not yet been started.

7. To encourage the retention of breeding cattle, a bonus of 2,000Drs is offered for each heifer calf born on the farm and kept to first calf,excluding normal replacements. Sheep owners of 100-300 breeding ewes whoerect and equip suitable buildings to improve the management of their flocks

may recover up to 50 percent of the cost. Under the new scheme to encouragethe establishement of approved livestock units, subsidies of up to 50 percentof the cost of buildings and equipment and 30 percent of the cost of founda-tion breeding stock may be paid, within certain limitations and conditions.

-3-

. MnI11ber f ouler susies and concessions are also applicaDie tothe livestock sub-sector including feed grains at concessive prices, sub-sidies of 50-80 percent on the cost or veterinary medicines and equipment,a subsidized artificial insemination service and duty free imports.

9. Pasture improvement by reseeding is also subsidized at a rate of50 percent of cost on privately owned land and 90 percent on State-ownedland. So far, very little has been done.

Tobacco

10. Price support for tobacco was withdrawn in 1967 and replaced by asystem of income allowances and 'guide prices', which buyers are expected topay. The guide prices are determined each year by local committees and theyare very numerous since they vary from area to area and with type and quality.

11. In theory, there is no intervention price but co-operative soci-eties may buy to maintain prices and the National Tobacco Organization alsopurchases and holds stocks. The very large surplus held by the NTO on be-half of Government, which reached some 70,000 tons in 1967, has been greatlyreduced by sales of old leaf and scrap at low prices, often under bilateralagreements. As at 31.12.70, the stocks held by the organization amountedto 37,000 tons:

From 1965 and previous crops 15,000 tons

For the 1966 crop 6,000 tons

From the 1967 crop 9,000 tons

From the 1968 crop 7,000 tons

Figures for the small 1969 crop are not yet available as it is still in

orocess of disposal. The NTO is endeavoring to dispose of the remaining

old crop leaf which has been in storage for several years and continuesto deteriorate. Recent purchases by the NTO have been mainly of low grade

leaf, primarily to maintain prices of these qualities at a mimimum level.

Cotton

17 Cotton production continues to be subsidized at much the same rateas previously. In 1966 there was a support price of 1.50 Drs/kg of seedcotton. Under the new policv. this was changed to an income sunnort navmentwhich, in 1970, amounted to 1.40 Drs/kg of seed cotton. This is additionalto the free market price which averazed 7.65 Drs/ke in '1969 and 8.50 in 1970.The income support payment is made through the Agricultural Bank some monthsafter the crop has been marketed. The hone is that mechanIzation will even-tually reduce costs of production to a level that will enable income supportto be discontinued.

13. Mechanical pickers are subsidized up to 50 percent of cost and apayment of 0.80 Drs/kg is made for cotton harvested by machine. So far,this innovation has met with little success, mainly because of the farmstructure which results in a scatter of small plots with discontinuous rowsand at different stages of maturity.

14. Subsidies are also available for cotton seed for planting andcotton planters, but the limited funds provided for the latter have beeninsufficient to meet the demand.

15. KYDEP continued to buy limited guantities - 8,400 tons in 1969and 7,800 tons in 1970 - mainly of lower grade cotton in order to maintainprices.

Sugar Bant

16. ArPA cuhQidlas nre no longer nffirPd_ The prodne r nir 4Ade--

termined by the State, on the basis of the EEC price level, and incorpora-ted in an nnuail contract between far-mer ndA factovr The crop has expadedrapidly. In 1970, for the first time, production of sugar was equal to do-mpqtip~ dpmAnd- This nupr-fAwpd t-hp rhrPP P:iQrng fnPtnriac ndA twoa more

are planned in anticipation of increasing consumption. The new factoriesare expected to ---rate -in 1973 and 1975.

Fruit and Vegetables

17- Exprt 4A4--Ie for -fru4t -A vegtables have been dA-1 tIue

and additional funds have been provided to subsidize the means of production,i,,no

4 ricula owar thea productio4n C of earl vegeable au,nder cov.r T-4- 0-

developing very rapidly in southern Greece and Crete. Subsidies of 30-40percent o O cos are ofee for the est £LLC~ ablishmntLU o tflO new greo.uses~O. Young

trees and grafting material are also subsidized at this level if bought fromappruveu nurseries, auu SPrayi-ug6 ur __Axu m-uusuuvnt- rq_p_e

appUV U LU~C.L~~dLU JL UUZ>L.LL&6 [ULLALLL",j dLLU ULLLUL t::4U.~LPULLL J.VL

commercial orchards attract a similar subsidy.

18. In addition to these subsidies on plant material and equipment,citrus growers receive an income support payment or U.2u-u.3u ur g. Gov-ernment does not intervene in the marketing of citrus but guide prices,based on the international price level are determined each year. Thisappears to be merely a way of passing on market information to buyers.

19. Area payments for the establishment or improvement of permanentcrops are presently restricted to the re-establishment of vineyards forwhich subsidies of 400 to 2,000 Drs/str. are paid.

Dried Fruit

20. The intervention price system has been applied to sultans, cur-rants and dried figs, and income support payments are made to producers.The support payments made in 1970 were 1.90, 2.00 and 1.0-1.50 Drs/kg re-spectively. The corresponding intervention prices, at which the appropriatecooperative agencies buy on behalf of Government, were 7.10 and 7.00 and

- 5 -

3. 00-3.50 Drs /k in that year. The affet 4 tn antnure nrAducer nf min4-

mum returns which are roughly equivalent to the former State guaranteed

1) I .. a.n -r reec cotnue to - ahere to the. in-n a*iona Sutn A4 -f., - -. -~n A -r r - #

under which relatively high prices have been fixed in recent years. Worldprod.a<a -- A Aemr T ne e s mnaA wk , T_ itaO noAn 4- La k

IaUU%_ xUn CaLIU U m Au 6m s s ov uAusavAY. An& IJUJ, Fy u ctAon by tuefive principal producing countries reached a high point of 641 thousand tons,Lout In 10C.0 and 1070, their output. Ce11 .0 CC) an' L.'OO kn.U n-UU Ju I U n * y, U nU #jI%j %u& A.%.& Lu JJJ dU 92 LuuuanU Lons, andu

at the same time there was some improvement of demand. This enabled GreekMLUCAD LU U= LZUU#LU LU UUVVU LULIM aL LLIC CLU UL 17V in .LCit W tLII LMe g-

eral disappearance of world stocks.

22. The main buyer of currants is Great Britain where the demand isaecreasing, so that marketing problems have emerged. further plantings arenow totally prohibited. Exports of dried figs from Greece have also fallento a level of 8 to 10 thousand tons against a production of 20 to 22 thou-sand tons. Stocks have, however, been reduced to about 2,500 tons, mainlyby using the surplus for alcohol production.

STATTSTICAL ANNEX

TABLE OF CONTENTS

Table No,

-A. POPULATION AND EMPLOYMENT

1.1 Population and Emiation

and Level of General Education: 19611.39tutr fEpomn

1.4 Employment, Unemployment,9 and&duigratio:aI.5 Greo=k Ufn"rcknc in Gr"Ynny "FR nndl +h&ATr Or-la-In1.6 Employment of Greek WorkErs in Germany (FRG) by Branch of Activity

.1~ ~ w a.~+vc -4

of . - . o ke r _. G __1 .

1.8 Industrial Employment by RegionsIS0O, T-,A- a ^r Pnrw4 ,-1T,ri,14-c TATA"cr C,4n"A'-",

1.10 Regional Distribution of the Population.11 RuKiPonal Comparisons of PopulationE, miome. and Migration, 1965

B. NA.TIONAL~ ACCOMNS AND PUBLIC INVESTMENT PROGRMS

2.1 Gross National Product and Use of Resourcesr_ CL U.LI.Ji JJMV~S U,.J. 11 ±UUM~L VJJ 11MUSUL~IJJ U U3.. .1631

2a3 Gross Fixed Investment by Industrial Origin

n ~ ~ R L 7- .- 4- -. 4 A..m- -P A- -4n

lu r, -UI~~L.LJ JL U.L_ LI J U1i)I.LL J-111YUSU1101D D. L .Y.F 019 JU33UU

2.5 Financing of Gross Domestic Investmentross 'VJ.A2ULed~I A0tUIIV.VU.L.LJ. U.Y 0t.,U± Q .. ULLL

2.7 Gross Fixed Asset Formation by Sector (Constant PricS) A- ~ Urti 0 f .. 1'e.I ~ L .LI Y

2.9 Five Year Plan: Fixed Asset Formation by Sector2.10 Puriac nvesten Progras of Central byveRegion

2,11 Regional Distribution of Public Regional Development Investments

2.13 Implementationof Main Projects in Agriculture and TransportationBNUO . NATOL ACUNT D P I M

ro 4 mvluc u. y .uu. o rEpao u.

2.15 Financing of Public Investment

C. EXTERNAL TRADES AND PAIecE NsTS

3.1 Balance of Payments

3.,2rou in isibe mn rgaeovnrmwvrmn

3.3 Capital Movements2.13 Foreign Vestment Aprovals and Capgialtpurt Ta3.5 Foreign Suppliers' Credits3.6 Commodity Composition of Eternal Tramne3.7 Imports and Exports by Areas

3.8 Commodity Exports to the EEC3.9 Investnent, Industrial Output and Imports3.10 Calendar of Tariff Reductions of Basic Duties Within the EEC3.11 Import Duties and Taxes on Imported Goods3.12 Value of Tariff and Other Tax Exemptions on Imports by Category

of Beneficiary

D. EXTERNAL DEBT

4.1 External Public Debt Outstanding 1969 and 1970

4.3 Past Transactions on External Public Debt 1964-1969

E. PUBLIC FINANCE

.1 Revpnne and ETenditurp of Centr;l Government2 Central Government Ordinary Revenue

5.3 Central Government Current Expenditure by Function5.4 Central Government Current Expenditure by Ministries.q Current Revenue qnd Exnenditure of General Government

5.6 Current Expenditures of the Central Government-7 Ciirrpnt Rnn of thp. Cntrq] GovP.rnment

F. MONEY AND CREDIT

6.1 Money and Quasi-moneyv9'o Aff'PtMno the Mono-pr qunnlr

6.3 Central Bank Credit (Net) to the Governmentr'hiTtalutstndngn BPnnk rty-r+. ton then Eononmy

6.5 Analysis of Credit by Financial Institutions6.6 nConlidaed Balance Sheet of the Comrcial Banks6.7 Selected Interest Rates

6.9 New Security Issues6.10n A--,,-'l Yields to V-4--"-% of' Selcte Bon Isues6.11 Bank Credit for Fixed Capital Formation

G. AGRICUITURE AND FORESTRY

7.1 Land Classification in Greecer7 1)n-- A----too aU.rvy t" (ena

7.3 Crop Yields - National Averagest oL4 Qrop vUL:UyU

7.5 Idvestock Populations 1965-196976 Output vestock ' ouU;ts, 1966-170V7.7 Imports of Agricultural Commodities7.8 Exports of Agricultural Commodities

7.9 Agricultural Supports and Subsidies

H. OTHER SECTORS

8.1 Index of Industrial Production8.2 Gross Value of Output in Manufacturing8.3 Value Added in Manufacturing8.6 labor Productivity in Greek Manufacturing Industry8. EKrnorts of Manifactirinz Industry8.6 Exports as a Percentage of Production807 Tmnerts. Rmorts and Net Deficit of Industrial Products8.8 Production and Apparent Consuption of Industrial Products8.9 St.ninvmrA of GrPak Tndustry

a. Number of Establishment by Sizeh-. 1Emnloynnkt hv Ratbl I shment Si e

8.10 Private Investment in Maufacturing Industry

8.12 Arrival of Tourists from Abroad8.13 1a41 Roa and Air Trnanort8.14 Electric Energy Statistics

ViiYAMu Nnon ^P qohn)n^1 To-neho?,. wnrl Pirnil.q

8.16 Number of Hospitals, Beds, Doctors and Nursing Personnel

T 1JA.TR ANDT 99TflRR

9.2 Wages in Manufacturing

9.4 Consumer Price Index

Table 1.1& POPULATION AND EMIGRATION

(in thousands)

1950 1960 1965 1966 1967 1968 1969

Total Population 7,566.0 8,327.4 8,550.3 8,613.7 8,716.4 8,802.9 8,834.9

Births 151.1 157.2 151.4 154.6 162.8 160.3 154.1

Deaths 53.8 60.5 67.3 67.9 72.0 73.3 71.8

Natural increase 97.4 96.7 84.2 86.7 90.9 87.0 82.3

Emigration overseas*17.8 29.0 33.1 26.3 25.9 28.4

Emigration to Europe * 26.9 87.2 53.0 15.7 23.5 62.4

of which, Germany 21.5 80.6 45.5 9.7 20.2 59.4

Total Emigration *47.8 117.2 86.9 42.7 50.9 91.6

/a Excluding emigrants to other Mediterranean countries and persons not declaring country of destination.

Source: National Statistical Service, Statistical Yearbooks and Monthly Statistical Bulletins.

Table 1.2. ECONOMICALLY ACTIVE POPULATION BY DIVISIONS OF ECONOMIC ACTIVITY AND LEVEL OF GEERAL EDUCATION: 1961

Economic Activity With Higher With Secondary With Primary Not having EconomicallyEducation Education Education finished Primary active

Education Population 2a

Agriculture, etc. 2.3 19.5 848.1 1,082.8 1,960.4

Mining and Quarrying 0.3 1.1 10.6 9.5 21.5

Manufacturing 4.2 36.8 299.5 149.3 488.6

Communication 0.8 6.9 94.1 65.3 167.4

Electricity 1.0 4.4 8.9 .19.8

Commerce, etc. 8.6 65.9 13.3.2 !8.0 266.1

Transports, etc. 2.0 25.9 83.2 42.3 153.9

Services 81.8 100.0 165-4 91.3 439.5

Others 3.8 28.0 65.8 23.3 121.5

T 0 T A L 104.7 286.4 1,708.8 1,527.2 :3,638.6

Za Including persons not declaring level of education

Source: National Statistical Service. Population Census 1961, Volume III, table 12.

Table 1.3: STRUCTURE OF EMPLOYMENT

Numbers in thousands Averae Annua Percent Chan e191 91 1979 -91-ol 161-6

AgricuLture 1367.3 1960 .4 1850 a 3m6 -0.7Non-agricultural labor force

- Mining 13..6 21.5 23 4.7 0.9- Manufacturing 450.4 488 .6 536 0.8 1.2

LPublic Utilities 11.2 19.8 25 5-, 3.3Construction 75.0 167.3 230 /a 8.4 4.7Transport and Commimications 138-1 153.9 250 1.1 7.8Trade 219. 9 266.1 366 1.9 4.7

- Other Services 387.6 439.5 o80 1.3 1.2Subtotal 1295.8 '1556.7 1910 1.9 2.8Unclassified 176.4 121.5 106 -3*8 -1.6Total for non-agricultural 1472.2 1678.2 2016 1.32laOor force

Grand Tota 1 2839.5 3638.6 3866 2*$ 0.8

L Rough estimates

Note: 1. The data for the year s 191 and 1961 have been re-rvdp from the population censuses of 1951 and 1961respectively. E mployment data particularly in rural. sector, are not absolutely comparable due to theuse of different concepts with regard to the form of employrrIent, particularly in the case of house-keepers in rural areas.

2. Most of the 1969 data have been mainly derived from the census of Industrial, Commercial, etc.,Establishments of the year 1969. To define the active population, the number of unemployed personnelof the year 1969, as derived from the unemployed register office, was taken under consideration. Exceptionwas made for data on Construction, Transports and Communications which were taken from InsuranceOrganizations, because the Census of Establishments did not include drivers of taxis, trucks, etc.

Source: National Statistical Service

Table 1.h: EMPLOYHENT, UNE1MPL0rNT, AND EMIGRATIoN

/aEmployed UnempLoyed Registered Unem led Emrated

1961 Census 1961 Census 1966 1967 1968 1969 1966 1 1968 1969Numbers in thousands (December) Numbers in thousands

Professional, technical andrelated workers L25.2 2.2 1,352 -1,6o 1,461 1,458 1.0 0.6 0.7 0.8

Administrative and managerialworkers 26.6 0.2 27 119 49 50 0.1 0.1 0.1 0.1

Clerical workers 144.0 1.4 5,340 5,98L 5,811 5,650 1.6 0.9 0.9 1.o

Sales workers 222.0 3.3 1,968 1,906 2,361 2,226 0.6 0.4 0.7 1.0

Farmers, fishermen, hunters,loggers and related workers 1,955.7 32.4 3,033 2,260 1,750 1,660 21.2 5.8 10.9 32.7

Miners, quarrymen andrelated workers 18.5 0.7 1,282 1,508 1,063 947 0.0 0.0 0.1 0.1

Workers in transport andcommunication 108.1 6.4 1,868 :2,664 2,036 1,623 1.3 0.9 0.6 1.1

Craftsmen and industryworkers 678.9 57.6 51,103 65,021 54,000 45,210 12.7 6.4 9.2 13.4

Service and recreationworkers 224.1 5.7 6,074 7,364 6,997 6,623 1.2 0.8 0.9 1.3

Subtotal 3,503.1 109.9 72,047 88,426 75,528 65,447 39.7 15.9 24.L 51.5

Workers not classifiableby occupation 113.0/C 105.4 2,782 2,999 2,087 1,569 0.4 0.4 0.5 1.6

/b A AAGRAND TOTAL 3,653 8 . 6 215.2 7,829 91,425 77,615 67,016 86.9b42.¯ .: 91.7-

a In December: Excluding unemployed seamen and unemployed in agriculture.b Includ-ing emigrants Without profession.c Excluding Armed Forces

Source: National Statistical Services, Athens. Population Census, 1961, Volume II table 3 and Employment OfficeStatistics

Table 1.5: GREEK WORKERS IN GERMANY (FRG) AN]D THEIR ORIGIN

(in thousands)

1960 1965 1966 1967 1968 1969 1970

Total foreign workersin Germnny / )29A. 191AP A 191. Q1 -'A 1o89.9 1q01.h 1963.5/b

of which Greek workers 20.8 187.2 194.6 140.3 144.7 191.2 25o.9Zb

- Men 83.7 110.1

- Women . . . . 61.0 81.1

New arrivals Zc 259.5 524.9 424.8 151.9 390.9 646.1 0

of which Greek workers 23.4 61.8 39.7 7.6 37.2 65.1 .

- with officiallabor permits 8.2 33.3 26.9 1.9 2h.3 51.2 49.8

- of which women . . . 1.5 10.7 21.3 19.9

Origin of workers withofficial labor permit

Northern Greece . . . 1.1 13.5 31.6 26.9

Central Greece . . . .1 1.8 5.7 7.0

Epirus . . . .3 3.5 5.2 5.5

Attika, incl. Athens . . . .3 2.8 3.2 4.3

Pelepones .0 .1 1.0 1.9 2.0

Crete, Ionian Islands . . . .1 1.6 3.3 3.9

Aegean Islands 0; *2 .1.

End of September.

A January 1971.

c Full Year. Includes workers with permit of recruiting offices abroad and with permitof local 'Ihbor of-Nnps in Germany.

Source: Bundesanstalt fur Arbeitsvermittlung und Arbeitslosenversicherung: AuslandischeArbeitnehmer. Nurnberg 1970.

Table 1.6: EPLOYMENT OF GREEK WORKERS IN GERMANY (FRG)- AVITfT? n"T * -l1T TTTTflU 1-1

.. DrwullIu Yr iul.LV.L.L. -

nnD A 17 r T 7 -1nn - nf IOAA 104'7 1oA -1 A o

Agriculture, Forestry . 0.7 0.7 0.5 0.4 0.5

Mining, quarrying, energy . 5.8 4.5 2.8 2.4 2.6

Iron and metal producingand processing . 90.1 90.2 63.0 70.7 97.8

of which metal processing . 18.h 19.2 13.5 14.2 20.7

machinery production . 13.2 13.7 9.7 10.2 14.2

automobile production . 14.6 17.8 10.4 12.1 16.2

electrical equipment . 23.9 23.1 16.5 20.9 29.2

Other manufacturing . 68.4 74.9 53.0 53.0 67.9

of which textiles . 14.2 16.3 11.6 12.1 15.2

chemicals . 8.0 8.6 6.7 6.7 8.3

Construction . 10.5 9.8 6.6 5.2 6.7

Trade and services . 6.5 8.3 8.1 7.0 8.6

Transportation andPublic services . 5.0 6b1 6.3 5.9 7.1

Total 20.8 187.2 194.6 140.3 144.7 191.2

1 End of September.

Source: Bundesanstalt flr Arbeitsvermittlung und Arbeitslosenversicherung:AusLindische Arbeitnehmer. Niirnberg 1970.

Table 1,{ STATUS OF GREEK WORKERS IN GERMNY IN 1968 a

( in percent)

Men Women

1. g-25> years 7 3025-35 years Sh 4435-45 years 32 2345+ 7 .

2,, Family StatusSingle 22 21Married 78 79Of which with spouse in

Germany 61 74Without spouse in Germany 17 5

3. Duration of S3tay-2 years 8 242-h years 23 364-7 years 45 h7+ years 24 9

14 German KnowLgeFluent 26 15Some 66 68None 8 17

5. Professional PositionUnskilled 37 60Semi-skilled & 53 37

6o.ize of .rLoying PUlnt

-50 workers 12 850--200 wi.rkers 5 17200-500 workers 15 15

flo50 workers 58u6

Germany in September 1968.

Z Workers with professional qualifications at the time of placement reportedby the German Recruitmnt Office in Athens: 1965: 8.7%; 1966: 5. 91967: 8.h%; 1968: 4,7%; 1969: 2.4%; 1970: 4.5%

Source: Bundesanstalt flär Arbeitsvermittlung und Arbeitslosenversicherung:Ausifndische Arbeitnehmer. 19rnberg 1970.

Table 1-8 IKDUSTRILJ EMPLDYn? I REGION5(in thousands)

Absolute Vnibe:rs Abscie omiges Percent changesRegions iPen ~ -- T6195 7 - 1963 -196 9 158-3 16-9 1956936

1. Greater Athens L71.2 220.7 233.8 b9. 4 13.1 28 5

2. Central Greece and Bubcyea 31.3 36.8 43.7 5.5 6.9 17 18

3. Peloponesos L 9 42.h 2.3 -2.5 -3

. lonian Islaxmds ,5 5. -1.0 -. 0 13

5. Epirus 6.7 6.9 7.7 .3 .8 3 10

6. Thessaly 23.ä 24h 25.6 1.0 1.3 4 5

7. Macedonia 82,0 87.7 102.8 5.7 15.1 6 17

8. Thrace 8.9 8.2 7, -7 -3 7

9. Aegean Islands 21.h 18,2 15.7 -3.2 -2.6 -1a -13

Ir. Crete i8,.6 17.9 - - -7 -4

Total 413.6 471.6 501.6 57.9 30.0 14 6

Source: KEBE

Table 1-9 CHARACTERISTIC INDICES OF REGIONAL INELITES IN LIVING STANDARDTS5

Indices Greater Central Pelononesos Iorian Eb)irus Tnessaly Macedonia Thrace Aegean CreteAtherns Greece and Islands

Eub oea

1. Per capitaelectric powerconsuMtiona. Total (Wh)

1962 176 177 154 65 48 139 151 34 75 711968 1193 1750 343 186 119 338 648 87 201 207

b. For domesticuse (kWh)

1962 277 21 28 21 15 24 38 9 27 221968 482 54 66 72 44 57 96 27 79 72

2. Private cars per10000 inhabitants

1962 191 ]4 15 15 8 18 30 8 24 151968 h81 62 58 67 38 72 119 33 82 71

a. Doc-bor 1962 330 1756 1380 1514 1635 1562 1065 2236 1142 1279L968 31L 1265 1175 1243 1256 1246 810 18h9 959 110L

b. Dentist 1962 1150 2316 h157 7413 5655 4985 5089 7826 3234 45791968 1052 1131 h551 6928 497o 4570 3296 7754 3231 4737

c.Hospitalbed 1962 73 496 330 186 390 390 215 594 211 217

-L968 80 454 318 164 4-L6 351 212 581 109 197

Source: KEBE

Table 1.10: REGIONAL DISTRIBUTION OF THE POPULATION

(in thousand)

Tnlihi h-+ann.

Region Population Population Population Population per sq. km.I9-ql % 1961 1 1965 % 1970 % 1965

Greater Athens 1,379 18.1 1,853 22.0 2,083 24.4 2,357 26.6 4,811

Central Greece &Euboea 908 11.9 971 11.6 986 11.5 1,004 11.3 40

Peloponnese 1,129 14. 8 1, 096" 13.1 1,039 12.1 1,000 11.3 408

ULL3.kUl .LzUaU10 CZ7 v. L_) L. ~ 1L7W j-. AL.L .L V-J)

ThA.qaly 629 8 2 A0 8.3 708 8.3 722 8.2 51

Macedoria 1,701 22.3 1,896 22.5 1,938 22.5 2,008 22.7 57

Thrace 337 4.4 357 4.3 347 4.1 352 4.0 40

Aegean Islands 529 5.9 77 5.7 433 5.1 407 4.6 48

Crete 462 6.1 483 5.8 479 5.6 475 5.4 57

Total Greece 7,633 100.0 8,389 100.0 8,555 loo. 8,845 loo.o 65

Sources: 1951 Population Censu,s1961 Population CensusEstimates by Center of Plaiining and Economic Research for 1965 and 1970 Population

Table 1.11: REGIONAL C0MPARISONS OF POPULATION, INOME AND MIGRAT]DN, 1965

GDP per capita GDP per capita 1965 Population EBigration.in drachmas at regional indices 1961 0ansus in 1965

Region current prices Total in in1965> Greece Atihens Thusulad )bhosnd

= 100 = 100

Greater Athens 27,050 12.6 100.0 1,852.3 22.0 17- i).5

Central Greeceand Euboea 17,330 97.7 64.1 970.9 11.6 4.7 4.0

Peloponnese 15,760 88.9 58.3 1,096.4 13.1 13.0 11.1

Ionian Islands 12,990 73.3 48.0 212.6 2.5 3.8 3.3

Epirus 10,930 61.7 40. 4 352.6 4.2 8.2 7.0

Trnessaly 12,94o 73.0 47.8 689.9 8.3 6.5 5.5-, ~ ,,.0fý .' 9 ".os e Il.^ 3s *0

Thrcei ,54 65. 42. 356. -. .4 63

l. J4 w.

Aegean Islands 1).,11in 7Q .6ý i2. L,77. 5.7 6. 5.5ý

Crete 13,350 75.3 h9.h h83.3 5.8 3. 3.

Total 17.730 100.0 65.5 8.388.6 100.0 117.2- 100.0

a/ IncLudes 1.7 thousand emigrants who did not declare residence.

Source: Five Year Plan 1968-72, Ministry of Coordination and National Statistical Service

Table 2.1: GROSS NATIONAL PRODUCT AND USE -OF RESOUROES(billion drachmae)

/a

1960 1965 1966 1967 1968 1969 1970

(current pric~

Consumption 91.6 148.4 163.5 176.2 186.2 202.7-Private 79.8 127.9 140.3 148.4 156.9 169.4-ublc ii.8 2.5 23.3 217.0 29.2 33.2 •

Fixed investment (b) 19.9 38.6 43.1 h3.6 54.2 66.1-Private (b) 13.3 27.9 31.5 30.1 39.2 47.4-Public 6.6 10.7 11.7 13.5 15.0 18.7

Ohange in s tocks - .3 6.6 .6 2.4 1.4 .1

Foreign balan>e (b)(Net borrowing andnet transfers fromthe rest of the world) 5.5 16.6 11.2 10.9 14.0 16.7

GNP at market prices 105.7 176.9 196.1 211.3 227.8 252.2GDP at market prices 103.6 173.3 192.2 207.0 222.7 247.2Gross domestic savings (b) 14.1 28.6 32.6 35.1 41.6 49.5

(rnnstpnt 1958 prices)

Consumption 88.4 128.0 134.9 143.0 150.2 159.7 170.9-Private 77.6 113.6 119.8 126.4 134.1 142.1 152.3-Public 10.8 14.3 15.0 16.6 16.0 17.6 18.6

Fixed investment (b) 19.2 32.9 36.6 36.1 43.0 51.2 54.8-Private (b) 12.8 23.4 26.1 24.3 30.4 36.4 38.1

n nr 4 1 n ' ,l.0 "). ,i 1.. n y-Puli .c 6.3 9 .5 9 10.5 1. 12.6 U ýv 14.9 16.7

Change in stocks .2 5.9 -.• 1.5 1.4 .6 1.8

Foreign balance (b)

net transfers fromthe rest of the world) 5.4 17.0 10.7 11.3 14.1 16.9 17.3

GNP at, market prices 102.0 149.8 160.7 169.3 180.5 194.6 210.2GDP at market prices 99.9 146.1 156.6 164.9 175.4 189.6 205.2GroSS domestic savings (b) 135 2.159 2. 04 3.993

/a Provisional data.7 Excluding investment in ships

Source: N.S.S.G., National Accounts Division

Table 2.2: GROSS DOMESTIC PRObUCT BY INDUSTRIAL ORIGIN

(billion Drachmae)

1950 1960 1965 1966 1967 1968 1969 - 1970

(current prices)

Agriculture, Forestry, etc. 9.2 22.9 38.4 39.9 42.5 39.8 42.7Mlining and quarrying .2 1.1 1.2 2.0 2.0 2.5 3.0Manufacturing 4.5 15.7 24.4 27.7 23.6 30.6 34.1.Elctricity, gas, water 2.2 1.4 2.6 3.0 3.2 3.7 L.3Cons-ruction 1.4 6.3 10.8 11.6 12.0 15.3 17.8Transportation, communications 1.9 6.4 10.8 12.1 13.1 14.2 16.5Trade, banking 4.2 12.3 20.9 23.4 24.3 26.1 28.5Housing (rents) 3.1 9.6 13.5 14.9 16.3 17.9 19.5Aciministration, Defense 1.7 7.3 12.1 13.7 16.1 17.9 19.7Health, Educatian 1.1 3.6 6.5 7.1 8.1 8.6 9..O1er services 2.2 6.0 10.0 11.3 12.1 13.0 1.•G':DP at factor cost 29.6 92.5 151.7 166.7 178.3 189.5 209.8Net Income from abroad .2 2.0 3.6 3.9 4.3 5.0 5.0GNP at, factor cost 29.8 94.5 15.3 170.6 182.6 196.5 21L.8

(Ccristant 1958 prices)

Arrricultre, Foresty, etc. 15.3 22,3 29.7 29.8 31.5 29.1 30.5 3.Nining and cuarrying .3 1.0 1.5 1.6 1.6 1.9 2.2 2.1anacturing 7.3 15.4 23.1 25.7 26.2 28.2 30.8 33.5

ålectricity, gas, water .4 1.3 2.3 2.8 3.1 3. 3. .Con Ebruction 2.6 6.1 9.6 10.2 10.5 12.6 ih.3 15.0T,:,ansport, communications 3.5 6.2 9.5 10.8 11.3 12.6 14.3 .5.9Trole, Bandng 6.8 12.0 18.3 19.8 20.6 22.2 23.8 25.7Housing (rents) 6.0 9.1 -11.6 12.3 13.0 13.8 14.7 15.6Administration, Defense 5.2 6.7 7.7 7.8 8.0 7.9 7.9 8.0Health, Education 2.0 3.3 4.8 5.0 5.3 5.6 6.o 6.4Other services 3.6 5.7 8.8 9.5 9.9 10.6 i1.4 12.4GDP at factor cost 52.9 89.2 126.9 135.2 141.1 167.9 159.8 172.0Net Income frorm abroad .4 2.1 3.7 4.0 4.4 5.1 5.0 5.1GNP at factor cost 53.3 91.2 130.6 139.2 145.5 153.0 164.8 177.1

& Provisional data

Source: Mi.nistry of Coordintion, N.S.S.G., Nat:onal Accounts Division

Table 2.3 GROSS FIXED INVESTMENT BY INDUSTRIAL ORIGIN

(Billion Drachmae)

/a /a1950 1960 1965 1966 1967 1968 1969 1970

(current prices)

Agriculture 0.6 3.5 4.8 h.8 5.5 6.5 6.9 7.6Mining and quarrying 0.1 U.1 0.5 0.5 0.6 0.6 0.6 0.8Manufac tur:ing 0.8 2.0 5.3 5.8 5.5 6.8 7.5 9.2Electricity, gas, water 0.1 1.5 5 3 3.1 4.5 5.0 6.5 6.1Transport, communication . 3.8 6.9 9.1 9.-, 10.6 13.2 l.6Housing 1. 5.7 1.9 13,3 12.- 16.9 20.9 19.8Public administration 0. 0.3 0.~ .. h 0.3 0.6Other ::. 2.9 . .2 5.9 7.-_9.8 _' _Gross fixed investnent /b.5 19.8 35. .3.2 h3.75.2 .0 71.2

(constant 1958 prices)

Agriculture 1.3 3. l h.4 4.3 4.13 5.5 5.7 6.1Mining and quarrying 0.1 0.1 0.4 0.4 0. 5 0.5 0.5 0.6Manurac tur ing 2... 6>oElectricity, gas, water 0.3 1. 3.0 2.8 3.8 4.1 .8.4Transport, communication 2.0 3.7 5.9 7.9 7.6 8.8 10.9 11.7Housing 3.2 5.6 10.4 11.5 10.2 13.h 16.0 14.9Public administratian 0.6 0.3 0.1 0.3 0.4 0.3 0.5 10.3Other 0.9 2.9 h.6 31 6.1 7.7Gross fixed investænt /b 10. 19.2 33.0 36.7 36.1 3.2 1.2

/a Provisional7F' Excluding investient in ships

Source: Ministry of Coordination, N.S.S.O. Naticnal Accounts Division

Table 2.4: CIWOSITION OF GROSS DOMESTIC INVEST=ENT ]BY TYPE OF ASSETS

(billion Drachnmae)

/a /a1960 1965 1966 1967 1968 1969 1970

(current prices )>,ellings 5.7 11.9 13.3 12.1 16.9 20.9 .

Non-residential bildings 3.,1 4.8 5.8 5.7 8.2 9.3

Other construCtion 5.6 9.4 9.8 10.6 12.5 14.1 •

Machinry and other equipmhent 13.1 1.2 18.0 17.4 23.1 30.4

Gros fixed capital formation 27.5 40.3 46.9 65.8 60.7 74.7 .

Changes in stocks andstatistical error - 0,.3 6.6 0.6 2.4 1.h 0.1

Gross domestic investment 27.2 46.9 47.5 48.2 62.1 74.8

(constant 1958 prices)

Dwel lings 5.6 10.h 11.5 10.2 13.4 16.0 1.7

Non-residential buildings 3.1 4.4 5.2 5.2 6.8 7.7 8.6

Other construp tion 5.4 8.7 9.0 9.7 11.0 12.1 13.7

Mtachinery and other equiprmnt 12.h 11.1 14.2 12.8 16.9 21.8

Gross fixod capital farmatian /b 26.5 34.6 39.9 37.9 48.1 57.6 •

Changes in stocks andstatlstical error - 0.2 5.9 -0.1 1.5 l. 0.6 1.8

'-oss domestic investment 26.3 40.5 39.8 39.4 49.5 58.2

Provisional data.including investrant -in ships

Source: Ministry of Coordination, N.S.S.G., National Accounts Division

Table 2.5:: FINANCING OF GROSS DOMESTIC INVESTMENT

(billion Drachmae)

1960 1965 161 6 7 1968 1969 /a

Gross domestic fixed capitalformation /b 27.5 140.3 46.9 45.8 60.7 74.7

Change in stocks -0..3 6.6 9.6 2.4 1.4 0.1

GROSS DOMESTIC INVESTENT /b 27.2 46.9 47.5 48.2 62.1 74.8

D0OM4ES TIC FI NANCING 17.0 34.8 39.6 42.0 43.6 57.6Depreciation 6.0 9.9 11.4 12.6 14.0 16.0o

PRIVATE SAVING 8.4 21.3 22.5 26.h 27.5 32.5-Corporations 0.6 1.9 1.9 1.6 2.3-Hcuseholds 7.8 19.4 20.6 24.8 25.2 32.5

PUBLIC SAVING 2.6 3.6 5.7 3.0 7.1 9.1

FOCREIGN FINANCE 10.2 12.1 7

/a Provisional data7 Including investrent in ships

Source: N.S.S.G. National Accounts Division

Table 2.6 GROSS FIXED ASSET FORMATION BY SECTOR

In million drs. at current prices

Sector 1960 1965 1966 1967 1968 1969

Agriculture, animalbreeding, fishing, etc.

public 1,519 1,487 1,810 1,695 1,930 2,537Private 1,971 3,321 3,020 3,846 4,521 4,415Total 3,490 4,808 4,830 5,5h1 6,451 6,952

Mining and QuarryingPublic 9 74 78 86 70 75Private 97 18 1120 539 563 560Total 106 492 98 625 633 635

ManufacturingPublic 341 85 90 70 65 34Private 1,698 5,693 5,723 5,391 6,763 7,478Total 2,039 5,778 5,813 5,461 6,828 7,512

Electricity, gas, etc.Public 1,252 3,347 2,962 ,353 4,862 6,444Private 245 130 148 151 97 99Total 1,497 3,77 3,110 4,504 4,959 6,543

Transportation and com-mnnintion

Public 2,428 4,144 4,575 5,216 6,017 6,822Private 9,024 4,473 8,234 6,158 11,129 15,077Total 11,452 8,617 12,809 11,374 17,146 21,899

of which: shipsPublic --- --- --- --- --- ---

Total (7,670) (1,724) (3,748) (2,319) (6,649) (NA)

DwellingsPublic 283 500 781 711 675 615Private 5,447 11,393 12,507 11,381 16,236 20,333Total 5,730 11,893 13,288 12,092 16,911 20,948

Other service industriesPuh4 737 1 m39 1 ,09 1 ,36 1 ,9 1 751Private 2,485 4,245 5,152 4,913 6,33 6,422Total 3,222 5,274 6,544 6.279 7,828 8,173

/aTotal public 6,569 10,676 ii16RA 13,497 15,014 18,680

Private 20,967 29,673 35,204 32,379 45,742 56,118Total 27,536 40,349 46,892 45,876 60.756 74.798

/a Including investment in ships.

Source: N. S. S. G.

TabLe 2. fi RoSS FIXED ASSET FoRMATIN BYi EToLU

In milIdrs. at con1Stanft15 price-"S

Sector 1960 1965 1966· 1967 1968 1969

Agriculture, etc. ,8'oPublic i,488 1,378 , u,5, L,1L,59 2,16Private 1,927 3,003 2,600 .3,277 3,870 3,561Total 3,2415 ,381 ,,5,1 5,72J

Mining and quarryingPublic 9 69 71 77 61 65Private 93 288 339 385 404 414Total 102 357 41o 462 465 479

ManufacturingPubli& 292 79 83 64 56 29Private 1,67 4,162 ),-067 3,627 n),03 5,P)hTotal 1,759 4,241 4,150 3,691 4,459 5,073

Electricity, gas, etcPublic 1,173 2,849 2,636 3,669 4,056 4,730Private 212 109 135 137 84 83Total 1,385 2,958 2,771 3,806 4.14o 4,813

Transportation and com-munic a.qti on

Public 2,377 3,768 4,115 4,616 5,073 5,629Private 8,688 3,791 7,065 4,883 8,754 11,689Total 11,065 7,559 11,180 9,499 13,827 17,318

of which: shipsPublic --- --- --- --- --- ---Pr i - (-773 3293 1 ,88 (56c5) (NA)

Total (7,354) 1,673 3,293 1,885 (5,165) (NA)

DwellingsPublic 280 437 674 604 532 511Private 5,366 9,968 10,791 9,645 12,853 15,484Total 5,646 10,405 11,465 10,249 13,385 15,995

Other service industriesPublic 730 922 1,221 1,219 1,096 1,733Private 2,426 3,761 4,427 4,233 5,226 6,480Total 3,156 4,685 5,648 5,452 6,372 8.213

/aTotal--

Public 6,349 9,504 10,458 11,790 12,943 14,860Private 20,179 25,082 29,424 26,187 32,832 42,755Total 26o,o28 34,8o 39,882 37,977 47,775 57,615

Source: N. S. S. G.

Table 2.8 GROSS FIXED IVESTMENT OF PUBLIC SECTOR(billion Drachmae)

1966 1967 1968 1969 1970

At Current Prices

General government 7.7 8.2 9.1 11.0 13.5

Central government 5.9 6.2 7.7 8.9 11.0

Other government 1.9 2.0 1.4 2.1 2.5

Public enterprises 3.9 5.3 5.9 7.7 7.8

TOTAL Ll.7 13.5 15.0 18.7 21.3

At Constant 1958 Prices

General Government 7.0 7.4 7.9 9.2 11.0

Central government 5.3 5.6 6.6 7.5 9.0

Other government 1.7 1.8 1.3 1.8 2.0

Public enterprises 3.4 4.4 4.8 5.6 5.7

TOTAL 10.5 11.8 12.6 14.9 16.7

Za Preliminary

Source: NSSG Natianal Account

Table 2.9 F I YEAR PLAN: KED ASST; FORMATION BY SECTORý(billion Drachmas at 1967 prices)

A moun L 0onT

1962-1966 1968-L972 1962-1966 1968-1972Total 1ublic Private Total Public Private Total Public Private Total Public Private

P riculture, Fishing 23.6 9.7 13.9 39.0 15.0 2,.0 12.I 18.6 10.6 12.3 lb.2 11.3Vor(stry

Mining 2.1 .3 1.8 ).0 2.5 1.5 1.1 0.5 1.5 1.3 2.h 0.7

ManufacturLng 23.5 2.3 21.2 10.0 1.0 39.0 12.8 4.3 16.2 12.6 1.9 18.5

Utilities 14.5 13.7 .7 36.5 35.0 1.5 7.9 26.2 0.5 11.6 33.2 0.7Electrictty 11.3 f112 .1 3¯.0 30.¯ - 6.2 21.5 - 9.5 28.) -Water-Sewerago 3.1 2.5 .6 6.5 5.0 1.5 1.7 5.8 0.5 2.1 h.8 0.7

Transportation andCommunications 32 19.3 1._9 57.0 .0 21.0 18.7 36.9 11.0 18.0 31.3 11.3

Transportation 30.2 15.3 14.9 47.0 23.0 25.0 16.h 29.1 11.h4 15.8 21.8 11.3Communications h.1 h.1 - 10.0 10.0 - 2.2 7.8 - 3.2 9.5 -

Dwellings 60.5 2.3 58.1 86.o 3.5 82.5 33.0 4.5 45.5 27.0 3.3 39.0

Stores 12.1 - 12.1 20.0 - 20.0 6.6 - 9.3 6.3 - 9.5

Tourism 2.6 1.1 1.) 15.0 2.5 12.5 1.h 2.2 1.1 h-7 2.) 5.9

UOOher Services 3.8 j. 4 .5 16.5 12.5 2.u 2.1 0.i 0.35 11. 0 -. 1.0

Education 1.7 1.6 .1 9.0 8.0 1.0 0.9 3.1 2.8 7.6 0.5

Health and Welfare .7 .3 .1 2.5 1.5 l.0 0.h 0.5 0.3 0.8 1.5 0.5

Public Administration 1.5 1.5 - 3.0 3.0 - 0.8 2.8 - 1.0 2.8 -

Not Classified 6.5 .2 6,3 5.0 .5 5.5 3,5 c.h 4.8 1.6 C.5 2.1

Total 183.3 52.5 130.9 317.0 105.5 211.5 100.0 100.0 1.0 100.0 10 1o.0

Source: Five Year Plan

Table 2.10: PUBLIC INVESTIENT PROGRAMvS OF CENTRAL GOVERNMET(Billion Drachmae, Current Prices)

1963-67 1968-72 1968 1969 1970 1971 1972 1968-72Actual % Program % (Actual budget) Projected Actual*

Expenditures

Agriculture, Forestry 7.8 26.5 11.9 19.6 2.1 2.7 3.2 3.2 2.4 13.6Manufacturing, Mining 1.5 5.2 1.9 3.1 0.2 .2 0.3 0.6 .h 1.7Transportation L1.6 39.0 15.9 26.1 3.1 3.0 3.7 3.8 3.9 17.5Tourism 1.5 4.9 3.1 5.0 0..3 .6 .6 .7 .7 2.9Education 1.9 6.3 6.2 10.1 0.5 .8 1.1 1.2 1.9 5.3Health 0.3 1.0 1.5 2.5 0.2 .1 .2 .2 .h 1.1Housing, ater 1.5 5.1 4.4 7.2 0.7 .6 .8 .9 .8 3.8Regional Development

(Local Authorities) 1.6 5.3 9.3 15.3 1.5 1.8 2.1 1.8 2.2 9.4Others 1.3 4.3 2.3 3.8 0.5 .7 .9 1.3 .5 3.8Administrative expenses 1.0 3.3 1.0 1.6 0.2 .2 .2 .2 .2 1.0Contingeneies - - 3.5 5.7 - - - .0 1.0 1.0

TOTAL EXPNITRE 29 100 61.0 10_ 9.3 10.8 12.9 1h.0 1_4.3 61.3

Finang

Contribution of currentbudget 6.7 22.5 17.5 28.7 2.2 2.8 3.7 4.3 4.8 17.8

Revenues from investmentpro je c ts 5.1 1 7.1 5.5 9.0 .8 .8 .9 1.2 1.3 5.0

Domestic tnrroing-Issue of bonds 5.4 18.1 10.5 17.2 1.8 2.0 2.2 2.h 2.2 10.5-Treasury bills 6.6 22.1 17.8 29.2 2.5 3.0 3.h h.h 4.3 17.6

Other (Banking loans) .3 0.3 - 15.9 - - - - - -Foreign bo rrowing /a 5.8 19.4 9.7 15.9 1.9 2.2 2.8 1.8 1.8 10.h

29I.9 100 ŠL. 10 .3 1 12¯9 l¯o l~.~3

'a Foreign borrowing(in million U.S. $) 194.0 323.7 63 .8 72.5 91.8 58 .3 58.3 3)46 .7

* 1972 Projected

Source: Ministry of Coordination

Table 2.11 REGIONAL DISTRIUTION OF PUBLIlnu REGIONAL DEVEL OPMENT INVETMENTS

(in percerit)

Regions 1968 1969 1970 Total Popu]ation

l Northern Greece 32.0 32.3.0 330 26.8

(a) Macedonia ?7.0 28.o 27.0 27.0 22.8

(b) Thrace 5.0 4.0 7.0 6.o 4.0

2. Thessaly 9.1 8o1 8.1 8.1 8.3

3. Epirus 7.1 8.0 8.1 7.2 5.4

h, Central Greece 6.2 7.2 11.0 8.1 16.1

5. Attica and the Aegean Islands no 14.1 10.0 13.0 33-9

(a) Attiki. 1010 61 6.0 7.0 27.9

(b) Aegeani Tg rl! 1.0 8.o 4.o 6.0 h.C,

6. Peloponnesos 1710 18.0 17,0 17.0 16.1

7. Crete 1 .0 9. 9.1 9.1 5.1

100.0 100.0 100.0 100.0 100.0

Absolute figures (Mil~lion Drs.) 1463.0 1824>0 1953.0 5240.0 8898.c)

S ource : KEBE

Table 2.12: IMPLEEANTAION OF PUPLIC JIVESTE T PROGRM4 OF 0ETRAL GOVERNMENT(million Drachnae)

Perenage ol Iver age Anrual Average Aniual Eaenditure

Of which: Number of Completed to .EXenditures nxpenditure of Expenditures per Per Completed ProjectSelected Numetr of projeets ompleted Projects Total Projects 'ompleted Projects ProjectSectors 1968 1969 1970 1968 1969 1970 1968 1969 1970 9 1697 11669 9 1 ? 70 lý66 162 1970 1968 1969 1970

Agriculture, Forestry 356 386 367 95 97 66 27 25 12 2116 2768 3177 221 75 31 5.9 7.1 8.8 2-3 1.8 9.8

Industry, iKning 66 51 56 3 i 5 7 2 9 21, 229 279 37 3 1 4.6 4.5 5.0 12.3 3.0 0-2

Transportation h,82 637 3h6 58 182 89 12 j2 23 3117 302; 3671 10 263 38 6.5 6.9 10.6 0.2 1.3 0.5

Tourism 219 211 189 100 83 66 68 39 36 3h2 603 581 I83 601 166 1.6 2.9 3.1 1.8 6.8 2.8

degional n-velopuent 2167 2035 1966 782 698 672 36 36 36 1h64 1826 2067 537 627 726 0.7 0.9 1.1 '.7 0.9 1.1(Local authorities)

Source: inistry of CoordLnation

Table 2.13: IMPIEMENTATION OF MAIN PROJECTS IN AGICULTURE AND TRANSPORTATION(million Drachmae)

/a

Total Expenses up Percentage Initial Budget Allocation Realized ixpenditures Percentagc of cealizationProject Estimated Cost to 1970 of total 1968 1969 1970 1971 1968 1969 1970 1968 1969 1970

Agriclture/Irrigation /b

Acheloos /c 3900 2572 66 140 311 390 a7d 130 738 688 93 237 175Pinios 2270 1253 55 250 193 126 183 193 97 71 77 50 56Alfios /c 1820 962 53 - 2h0 210 220 - 352 328 - 117 156Thessaloniki 1800 1685 91 175 150 90 65 172 125 85 98 83 9LLarissa 1680 151 3 15 25 17 38 16 8 16 36 32 94Ardas-Evros /c 1895 299 20 100 100 190 215 86 21 229 16 21 121Serre /c 1100 98 9 . . 125 . * 6 * . *Nestos 700 552 79 36 30 30 38 33 16 81 92 53 137Evros 650 522 80 50Strimon /c 623 113 18 . . 66.

Total Agriculture/Irrigatim /d 182h 9516 52 . 1697 .

Transp or tat ion/Highway

Egnatia (North--East) /c 8500 72 2 - 108 100 837 - 36 36 - 33 36Korinthos-Patras 2800 2267 81 550 380 280 230 389 821 313 71 111 130Larissa-Thessoloniki /c 1600 319 20 72 85 281 375 7 59 10 69-Chalkidiid 1500 589 37 210Thermopylae-Antirion /c 1300 302 23 - 75 118 200 - 51 179 - 68 152Kastelion-Jraklion 1200 906 76 ( 200 175 205 225 ( 151 197 263 76 113 128Jraklion.-Sitia 1100 393 36 ( -150Joannina-Larissa 600 574 36 . 10Joannina-Agrinion 670 629 9* 27Joannina-Patras 570 530 93 160 125 50 25 113 101 122 71 81 284

Total Transportation/Highway /e 28671 13221 5L * 2700 .

/a Approved credits have been increased during the year.77 Only expenditures of Ministry of Public Work. In addition there are expenditures of the Ministry of Agriculture.77 A contractor loan finances the new or carry over work of the project since 1968.

There are 6 contract loans in irrigation and 1 in highway construction financing 70 percent of total costby finance from abroad.

/d 19 projects (irrigation, flood control, land reclaimation).77 60 projects (25 highways, 3 bridges, 32 improvements).

Source: Ministry of Public Works, Ministry of oordination.

Table 2.14 ]:NVESTMENT OF PUBLIC ENTERPRISES

(Million Drachmae)

At Current Prices

1967 1968 1969 1970 1971 1972

Power (:P.P.C.) 3592 3957 5250 700 6150 7135

Telecormmunications (HTO) 983 1299 1634 2250 3598 2200

Piraeus Harbour Authority 171 107 93 100 a

Sewage Authority for 137 120 180 250 0the Athens Area

Workers' Housing Organization (WHO) 66 139 182 100 ,

Miscellaneous 348 278 356 1400 0

TOTAL 5297 5900 7695 7800 0

/a Provisional Data and Forecasts

Source: NSSG National Accoint Division

Table 2.15: FINANCINIG OF PUBLIG EINVESTENT

(in billion drachmas a+; current orices)

- - - - - - - - - - - - --=

1964 1965 1966 1967 1968 1969------------------- ------------- ~-----------

Pu1Ile in-,estiflnt1? 117 I, 1.087

Publicsavin 5.3 4.5 6.5 4.0 8.4 10.9

Central Goverrinient 1.6 0.5 2.6 1.0 2,8 2o5Local autlorities 1.9 1.8 1.7 1.8 2.6 3.5Social Security 1.0 1.3 1.4 0.2 1.7 .1Pub-Lic corporations 0.8 0.9 0.8 1.0 1.3 1.8

7T..-I,-T1 , n,14-h/ -4- 'IL 1.1 1L7

ros.s drawing;s 1.4 1.7 2.7 2.1 2.9 3.3Amortization - 0,3 - 0.3 - 0.6 - 1.0 - 1.2 -1.1

Net dcries«",-c c2,ed(it 6,9 4,4 7.6 .55.9

Central Bank e/ 2.5 0.8 2.1 0.9 0? 3.5Comnue:rcial batlks d/ 3.4 3.2 3.9 2.2 3.0 5.0Bon issues k/~1j08 2. . . .Amfortization f/ - 0.2 - 0.4 - 0.6 - 0.3 - 0.7 1.6

.R~f;iåua ~2-7 - 12 ____ 4__

Total financinL, 10.7 11.9 'I, 74--18.7

a/ Based on national accourtingý data.]V From balancze of -payments data.0/ Central B:uk advances to Central Government, before subtracting

state credtit accoIUts.d/ Changoes in bank credit to rest of public sector, plus issues of

not of Cental Bank opertioe/ Entire oublic sector.~/ Central~ Gvecrnwmt only.

Sources : inistry of Coordination, Ministry of Finance, Bank of Greece.International Mlonetary Fund and mission estimates.

Table 3.1: BALANCE OF PAYETS(Mlllion US$)

Current AccountForeign Trade

Imports (cif)- 520.4 1028.9 1152.7 1161.2 1248.5 1433.6 1704.6i~\~r',4- nA- QY A ,]~ 1 ). c A 4 1.. n cin-ports (''b) , 208.6 330.9 '-4.5 h.. 464.9 53.3 6.

Trade balance-' -311.8 -698.0 -749.2 -708.6 -783.6 -903.3 - 1 09 2 .

Services, net 117.3 205.6 246.4 242.8 285.0 268.5 330.6of which Transportation, net 67.3 145.5 149.8 183.8 212.6 211.9 227.8

Tourisr, travel, net 32.6 66.1 102.9 86.0 77.9 101.6 138.3InTes U-ent income

(itretec.,e .3- -5. -122 -90 -3. 2. k.

Worker<' re?iances 90.4 206.9 235.0 232 1 239.4 277.0 32.9

Invis-ibles, ne t 207.7 412.5 481.h 47h.9 52h.b 5L5.5 673.5

Current Arcouri. 2S.Iance -104.1 -285.5 -267.8 -233.7 -259.7 -357.8 -418.9

Gapital Aiccountl,ong-terI[. publi capitl . 5. 9.0 70.5 67.9 83.7 44.1

Repaymerits . 8.8 13.9 35.5 4o.6 37.7 38.4Other long-tern canital to the PuicH4'sectorx (contractor loans),net - - - - - 19.7 37.1 79.9Frivate direct investnent,net / . 85.5 64.7 53.9 30.1 24.3 52.9Cther privatc long-term, net . 58.0 65.2 54.4 71.9 77.7 88.8

Total •i:,g-Te-n C.pital. 190.0 206.0 143.3 1 9.0 185.1 227.3i~dm-em:~t1to jtate bankMt3 - - 9.3 42.1 55.3 40.2

Repayments - - ·· - - 6.6 25.8Short-berm private cpital, net . 4.o 12.4 9.0 19.3 42.9 6Suppliers ' creits, net . 37.8 45.4 24.2 69.2 55.5 82.6Public grants-: . 17.0 9. 6 - 3.0 n .8

Capital 3alarnce I . 248.8 269.3 191.9 281.4 335.2 393.2rrcrs and omiss:ions . - 0.1 2.1 29.4 - 1.1 23.6 9.6ovralrl alan. . -36.8 3.6 -12.h 21.1 1.0 -16.1Monetary Movement

Non monetary gold' . - 22.2 35.2 17.7 -International organizations . - -2o .2 - - - -10AUse of SDRs -Change in Clearing Acco-unt and

pri-ate barter . -5.8 3.3 9.3 3.0 5.9 6.5Foreign exchange and gold holdings . -31.0 12.3 13.5 35.8 - 4.9 -16.hOfficial Reserves- 238.0 250.3 272.6 286.1 321.9 317.0 310.1a/ -ncl1ing vale of machinery imported under Investment Law 2637 and value of PL 480 T II Aid.b/ Transfer of gold from the Domestic Sovereign Fund to the Foreign Exchange Account of thebank or Greece.c Including Pund Gold Tranch Position and SDRs

Source: Bank of 3reece. Reclassification adjustments made by tae mission.

Table 3.2: INVISIBLES

(Million US $)

1960 1965 1566 1967 1968 1969 1970

A. Services

Transportation inflow 76.5 163.8 182.5 214.4 242.9 242.1 269.8outflow 9.2 18.3 32.7 30.6 30.3 30.2 42.0

Tourism and tra-vel inflow 51.4 107.6 143.5 126.8 120.3 149.5 193.6

outflow 18.8 41.5 40.6 40.8 42.4 47.9 55.3

Other servicesLa inflow 45.6 63.0 68.5 79.5 109.0 107.8 122.6outflow 33.5 63.9 62.6 87.5 90.7 123.5 113.,7

Non-factor ser-vices inflow 173.5 334.5 394.5 420.7 472.2 499.I 586.0

outflow 61.5 123.7 135.9 158.9 163.4 201.6 211.0

Investment income(interest, divi-dends, etc.) inflow 9.3 8.0 6.4 6.2 7.0 9.8 11.5

outflow 4.0 13.1 18.6 25.2 30.8 39.1 55.9

Services net inflow 117.:3 205.6 246.4 242.8 285.0 268.5 330.6

B. Emigrants' andworkers' remit-tances inflow 90.4 206.9 235.0 232.1 239.4 277.0 342.9

Total Invisibles net inflow 207.7 412.5 481.4 474.9 24.4 545.5 673.5

/a Insurance, Government services including expenditures of foreign missions and NATOinfrastructure, wages, salaries, representatives' commission, telecommunications, and others

Source: Bank of Greece

Table 3.3s (AfITAL M-UVIl.ITS

(Million US Dollars)

1965 1966 1967 1968 1969 1970

I. Capital to the public sector, net 63..5 81.6 50.b 123.9 159.8 115.9

1. Tnna-tRrm qanitaI. net h6.5 76.1 35.C 7.0 83.1 85.6

(a) Goveriunent, inflow 25.7 83.3 38.2 42.0 50.6 30.4

Commercial - ( 12.5) (10.C) (25.0) (27.5) (10.0)outflow 4.0 9.2 22.L 22.5 28.9 29.5

(b) Public enterprisesinflow 29.6 6.7 32.3 25.9 33.1 13.7

of which:Commercial - ( 5.6) (27.2) (24.6) (22.2) (13.5)

outflow i4.8 4.7 13.1 18.1 8.8 8.9

(c) Contractors'loans/b inflow - - - 19.7 37.1 79.9

Gross public capital inflow 55.3 90.0 70.5 87.6 120.8 124.0of which cormnercial loans - (18.1) (27.2) (69.3) (86.8)(103.4)

2. MAHinim-tArm l nan to

State banks /c inflow - - 9.3 42.1 55.3 40.2outflow - - - - 6.6 25.8

3. 1hort- and Medium-term suppliers'credit, n3-0tAl

b. Grants, net /e 17.0 5.5 6.1 1.8 3.0 1.8

II. Capital to the private sector,net 185.3 187.7 141.5 157.5 175.4 277.3

1. Long-term capital, net, 143.5 129.9 108.3 102.0 102.0 1141.7

.. :.wa+).,+ Dir1by ot 2 '701 A,on i1o 7 C RL.?outflow 5.8 5.4 9.1 15.8 33.2 31.8

of which: invest-mert Law i1d/-1OUf/1953 /f inflow (72.2) (48.4) (32.6) (33.0) (25.8) (50.0)

outflow ( 1.6) ( 1.9) ( 8.7) (10.2) (21.7) (24.5)other

venture capital/g inflow (19.1) (21.7) (30.4) (12.9) (31.7) (34.7)outflow (4.2) ( 3.5) ( 0.L) ( 5.6) (11.5) ( 7.3)

(b) Other pivatacapital /1l inflow 64.0 70.2 60.7 77.7 84.5 97.0

outflow 6.o 5.0 6.3 5.8 6.8 8.2

Gros3 privaLa capital inflow 155.3 1140.3 123.7 123.6 1h2.0 181.7

2. Short and medium-term capital, net 1.8 57.8 33.2 55.5 73.4 135.6

(a) Private bank loans/ inflow 2.0 0.9 4.3 1.8 10.2 18.7outflow 1.2 1.7 3.5 3.8 0.0 1.3

(b) Othar dfeposits net 3.2 13.2 8.2 2 1.3 327 107

(c) Private suppliers credits,net 37.8 45.4 24.2 36.2 30.5 68.5

III. TOTAL CAPITAL, NET 248.8 269.3 191.5 281.4 335.2 393.2

/a inoluing comm)rcial loans from private foreign banks and contractors to the publicsector, including State banks.

/b Commercial loans for financing the public investments./c Commercial loans to Bank of Greece, National Bank of Greece, Indvstrial Development Bank

of Greece and National Mortgage Bank of Greece; of which Bank of Greece: 1968: $31.4 million,1969: $53.8 million, 1970: $hO.9 million.

/d Dat,a of Public suppliers' credits in 1965-1967 are not available, these credits are in-cluded in private suppliers' credit.

/e Including reparations, restitutions and PL 480 T II Aid.7FIncluding estimated value of machinery imported under Law LD 2687/1953.7 Excluiing loann made to the private sector but channeled to the Fublic sector, (see

contrmtors' lans, and leons to StAte hanlA Incluing real estate investment.

B---,k of ,.'10cl

Table 3.4: FOREIGN INVESTMENT APPROVALS AND CAPITAL IMPORTSUNDER INVESTMENT LAW 2687/1953

- Mil3ion US Dollars) _

Number ofYEAR Applications Amount Amount

Approved Approved Imported

1960 41 74-3 11.7

1965 73 53.8 111.6 /a

1966 95 194.3 157.6 /a

1967 86 94.0 32.3

i296813 lie 226.5 35.5 /

1969 139 239.6 /c 33.0 /

1970 95 161.3 / 51.5 /b

/a Includes the big investments from Esso Pappas (refinery, steel and petro-

chemical complex: $81 million)) an Pechiney S.A. (Aluminium de Grece:

$116 million).lb Excludes investments for Airplanes of Olympic Airways: 1968: $15.6 million,

1969: $31.2 million and 1970: $16.5 million.

/c $130 million will not be realized.

7d Excludes, the big package projects of Onassis and Niarchos: $760 million

Note: The foreign capital inflow does not fully correspond with the balance

of payments data of the Bank of Greece, particularly in 1965 and 1966.

Source: Ministry of Coordination.

Table 3.5 FOREIGN SUPPLIERS' CREDITS

(Million US Dollars)

I. Outstanding Balance (end of period)

i96 1966 1967 1968 1969 1970

DivrnAin: ip ton 12) monnths 5. 459 157 18.q1.

up to 36 months . 82.4 87.4 98.0 109.1 121.2mnre than 36 monthR .7. 7.2 125. 1f25 181.6

TOTAT 239.8 2R52 309.5 378.7 3,.1 916.7

II. Changes ofp ~Ct+tAdin

Balances analysed perSector

Rrivate Sector . . . 37.1 30.9 68.5P Lu..lc Stor' .30 . . 32.1 24.5 .14.1.

T LA L4 2-I4. 2 9. 55. . 2.6

III. Chan[ges of ForigSuppliers' Credits NOV.

.~ L~. ~ L...1 n-7n~

mia s bny Ina turtL u -7 U

Medium term inflow 7h.7 85.7 112.7 142.0 137.1 140.0ý,å f !f,7 ~ 7n I . oni 4 *1no r' n- 0

7uw 61.9 67.9 79. 4 UC .6 1.u 7).u

net . 78 ,33. 59 .4 28 .6 46. -

Short term inflow 232.0 2 263 .3 26.0 38.1 3L4.7outflow 207.0 248.2 272.4 251.2 291.3 311.2

net 25.0 27.6 - 9.1 9.8 26.8 34.5

Total inflow 306.7 361.5 376.0 403.0 455.2 485.7outflow 268.9 316.1 351.8 333.8 399.8 405.0

net 37.8 45.4 2L.2 69.2 55.4 80.7

Source: Bank of Greece

Table 3.6 COMMODITY COMPOSITION OF EXTERNAL TRADE

(Million US Dollars)

1960 1965 1966 1967 1968 1969 1970

,. c, ".//b50 0.9 1152.7 16.2 28. 13.6 706of which:

Food /a 101.5 177.2 179.4 163.3 181.0 211.3 229.6Raw materials 131.9 230.9 258.5 241.1 253.7 309.5 366.5Fuel Lubricants 47.5 71.0 81.1 89.2 105.0 106.9 116.3

Cptlgoods /b 86.8 2631.8 28-.5 312 .0 331.4. 4.3 516.9irManufactured consumer goods /c 152.5 267.1 333.7 340.0 361.6 388.4 468.2

11. Exports, f.o.b. 208.6 330.9 403.5 452.6 464.9 530.3 612.2

Avricultural Droducts 169.7 27.9 IoRA iJ, '111 309.9 29 Aof which:

Tobacco 72.4 111.2 120.1 125.0 104.6 94.1 101.9Currants, raisins 27.3 43.4 41.4 3(.2 35.2 43.u 30.1Olives, olive oil 11.3 12.0 11.3 25.6 32.8 17.3 15.3Fruits, incl. citrus 10.6 26.0 23.8 30.2 24.4 36.3 38.0Vegetable and fruit pre- . . . 8.3 13.2 17.8 27.8serves and juicesWines and spirits 2.2 6.1 6.8 J01- CL. I

Cereals - 0.6 31.5 19.9 18.1 8.6 13.6Cotton 19.2 18.5 32.2 35.7 31.3 35.7 31.2Hides 9.4 13.3 13.7 10.1 15.4 16.4 13.3

Minerals and ores 18.0 22.5 27.0 21,6 3h.1 19.1 LC Q

Manufactured andpetroleun produuts 10.2 33.8 56.7 83.8 117.7 177.4 226.6of which:Textiles 2.6 7.4 15.1 15.1 19.3 25.7 3.Cement 1.0 2.1 2.7 4.3 4.2 7.3 5.0Chemicals and

petroleum products 1.0 1. 14.9 11 .4 20.7 2 5. 2 17.2Aluminum - 7.4 24.5 30.0 35.9 43.3Nickel 0 0.2 0 0.2 3.4 30.0 45.1Steel plates - - - 0.3 3.4 11.3 18.8Other metals - 6.7 7.8 4.9 5.4 6.9 10.1Fenwer Insthpr. firs (A.0 8.3 in.7 0. 17.7 16.0

Miscellaneous 16.6 11.0 12.8 1.6 3.9 5.7

Trade Balance -311.8 -698.0 -719.2 -708.6 -783.6 -90_.A Iog? .

/a Including PL 480 T 11 Aid77 Including machinery under Law 2687/53/c Including intermediate

5 rmrnp- Lqnk rX~ G~r pr-

Table 3j,7: ImPORTS AND EXPORTS BY AREAS

(in percent of total payments and receipts)-

I m p o r t s E x p o r t s1960 1965 1966 1967 1968 1969 1970 1960 1965 1966 1967 1968 1969 1970

EEC countries of Ahich 39.5 38.4 39.7 41.4 41.9 142.3 42.9 32.5 3L.4 32.0 34.6 39.2 38.2 40.3France (5.2) (5.9 ( (7.2 6. 6.1) (6.7) (5.3) (4.5) (7..8) (11.3) (9.7) (7.3) (8.2)Germany (19.8 (18.0) (17.5Y (IB.5) 8. 19.'2) (20.2) (17.0) (21.9) (17.14) (J4 .1) (18.2) (17.6) (18.3)Italy (7.h) (7.8) (3.5) (9.1) (9.4) (9.3) (8.9) (6.2) (h.1) (27) (5.0) (7.0) (6.8) (6.9)

Sterling area 12.2 13.8 12.9 13.3 10.6 14.0 1h.5 8.3 10.9 9.0 9.2 8.1 9.4 10.6

Other EMA courtries 9.0 9.4 9.4 8.7 8.6 8.9 8.1 6.1 4.5 5.4 5.4 4.7 6.1 5.9

USA 17.2 19.4 20.4 18.7 17.3 l.1 15.o 15.6 15.5 16.4 18.6 16.6 18.1 15.6

Other Western Hemispherecountries 2,6 2.3 2.0 2.6 3.7 46.8 3.7 1.7 0.5 0.5 0.6 1.0 0.8 0.5

U.S.S.R. and Eastern Europe 11.5 9.4 8.8 8.4 8.0 7.3 6.h 21.9 23.7 24.3 18.3 15.6 15.8 16.5

Other countries in Europe A 4.5 3.8 3.6 3.1 4.0 3.0 2.7 6.2 5.1 7.0 7.3 8.4 7.1 6.1

Others Z.5 35 3 5.9 5.6 67 7.7 5.4 5._4 6 _6.14 1. 5

Total 100).0 100.0 100.0 00.0 100.0 100.10000.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

/a Excluding supplier s' creditYugoslavia and FinlandIncludes Japan and Middle East

Source: Bank of Greece

Table 3.8 coMMOPTY EXPORTS TO TH EEC

EEC EXPORT TOTAL EXPORT SHARE OF EEC, in percent1960 1965 1969 1960 1965 1969 1960 1965 1969

Agricultural gods

IrdU.LUJI.'a

Raisins 7.8 15.0 16.0 27.3 43.4 43.0 28.6 34.6 37.2Olives and olive oil L.9 1.6 7.5 11.3 12.0 17.3 43.4 13.3 43.4Tobacco 24.6 43.3 33.8 72.4 111.2 94.1 34.0 38.9 35.9Cotton 4.6 1.5 1.1 19.2 18.5 35.7 24.0 8.1 3.1Hides and skins 2.7 1.7 2.8 9.4 13.3 16.4 28.7 12.8 17.1

Total traditional 44.6 63.1 61.2 139.6 198.4 206.5 31.9 31.8 29.

Cerei al. 86 - 27 9

Other food and beverages 8.2 - 24.5 49.9 32.5 6h.2 94.8 25.2 38.2 $2.6

Total agricultural $2.8 87.6 113.5 172.1 262.6 309.9 30.7 33.4 36.6

Minerals and ores 6.9 11.5 17.6 18.0 24.7 39.1 49.4 46.6 45.0

Text.iles - 2.8 1)19 2.6 7., 24.7 - 37.8 $8.0Metal products - 0.9 34.4 - 4.7 84.0 - 19.1 41.0Chemicals - - 9.6 - 1.3 20.7 - - 46.4Cement - 0.2 0.5 1.0 2.1 7.3 - 9.5 6.8Other 0.3 2.7 10.8 4.2 11.4 39.7 7.1 23.7 27.2

Total manufactured 0.3 6.6 70.2 7.8 26.9 177.4 3.8 24.5 39.6

Miscellaneous 5.8 8.1 1.3 10.7 16.7 3.9 54.2 48.5 33.3

TOTAL EXPCRTS 67.8 113.8 202.6 208.6 330.9 530.3 32.5 34.4 38.2

/a On paymnts basis.

Source: Bank of Greece

ablLZ.9 INVESTMENT, INDUSTRIAL OUTPUT AND IMPORTS

(in percent)

1960 1965 1966 1967 1968 1969 1970

Ratio of capital.good imports to--gross fixed investment 13.1 20.5 19.8 21.5 18.5 18.4 21.8-investment in industry /a 72.3 80.8 90.8 88.3 80.9 .3 96.3-investment in machineryfEnd equipment /b 47.3 63.3 60.1 61.6 60. 5

Ratio of raw material and fuel imports to-gross industrial products /a 29.9 31.3 31,2 29.3 29.4 30.2--gross manufacturing products 34.3 37.1 36.8 34.6 35.2 36.6-gross value of manufacturing output /C 16.4 18.0 16.6 16.5

Ratio of gross domestic savingsto fixed investment 70.1 7.0 75.6 80.5 76.7 74.9 (77.5)

/a Manufacturing, mining, electricity, etc. A Excluding investment in ships.7c Excluding gross value of food, drink and tobacco

industries where imported raw materials are negligible.

Source: Computed from Bank of Greece and Statistical Office Data

Table 3.10 CALENDAR OF TARIFF REDUCTIONS OF BASIC DUTIES WITHIN THE EEC

A) Products of te 12 years B) Products of the 22 years- transitional pericd. _transitional_joeriod.

Date Reduction Duties in Forde Date Reduction Duties in Forcein percent in percent

February 1, 1962 10 90 February 1, 1962 5 95

,may 1, 1964 20 80 May 1, 1965 10 90

February 1, 1965 30 70 February 1, 1967 15 85

May 1, 1967 0 60 May 1 1970 20 80

February 1, 1968 50 50 February 1, 1972 28 72

May 1 1970 60 40 May 1 197h 36 64

February 1, 1971 70 30 February 1, 1975 h 56

February 1, 1972 80 20 May 1 1977 52 48

February 1, 1973 90 10 February 1, 1978 60 40

February 1, 197 100 0 May 1 1980 68 32

February 1, 1981 76 24

February 1, 1982 8h 16

February 1, 1983 92 8

February 1, 1984 100 0

Source: Ministry of Coordination

Table 311: L.PORT DUTIES AND TAXES ON IMPORTED GDODSa

(Killion Drachmae)

1965 1969Value of Duties & Value of Import

Taxed Imorts Taxes Taxed Imnorts Duties Duties & Taxes

Total 19911 5857 286814 4775 8682Food and live animals 299 TT7 3373 962 -1wBeverages and tobacco 29 35 56 57 89Crude materials 2429 349 3040 259 505Mineral fuels 375 2146 440 111 417Oils and fats L2 16 112 85 94Chemical products 2232 607 3638 669 1172Manufactured goods 4916 1761 6650 1334 2381Machinery and transport equipment 6317 1349 101413 987 2013Special manufactured goods 919 1418 1222 311 548

March1965 1968 1969 1970

Average charge of value of goodstaxed from: Duties & Import Duties & Import Duties & Import Duties &

Taxes Duties Taxes Duties Taxes Duties Taxes- -- in_pecent)

Total 29.4 16.8 30.7 16.6 30.3 15.4 28.5

Food and live animals 40.6 27.1 43.9 28.5 43.3 26.4 39.0Beverages and tobacco 121.8 101.4 1141.7 101.6 158.9 100.9 160.2Crude materials 1.14.4 8.2 16.8 8.5 16.6 8.6 16.0Mineral fuels 65.6 4.2 96.1 25.2 914.9 29.2 94.5Oils and fats 35.7 35.3 49.0 75.5 84.2 33.3 41.7Chemicals 27.1 16.1 30.3 18.4 32.2 16.0 29.7Manufactured goods 35.8 21.4 37.5 20.1 35.8 19.9 35.4Machinery and transport equipt. 21.3 10.2 20.7 9.7 19.8 9.1 19.4Special manufactured goods 45.4 26.3 45.2 25.5 44.9 24.3 42.6

Ratio of import duties and taxesto value of all imports 17.2 . 19.2 . 18.2 . 14.7

Ratio of taxed value to total value of . - 62.6 - 60.0 - 51.6of imports

/a Business turnover tax, luxury and consumption tax

Source: National Satistical Service, Bulletin of Public Finance

Table 3.I' VALUE W TAnRF.C Alu uihbn JHRTA EEIMrfLulm\UN IMPORTS BY CATEGORY OF BENEFICIARY

(i.n iILLioL U as)L

I-nport Category 1963 196L 1965 1966 1967 1968 1969

Agriculture 21h 216 212 246 215 159 196

Industry 560 518 1297 1805 1257 747 842

Electricity, gas and 226 2h 293 65 h9 95 136water supply

Transport, including 379 407 589 500 hh9 h4 538ships

Social welfare, redicaland sanitary sUvices O2 77 (7 2L37

Pers-o.nal s ervic an,dtourism 10 6 5 7 8 13 13

Foreign investors 26 95 322 158 118 60 227

Other 591 447 1333 h30 504 629 606

TOTAL 2139 2062 4117 3288 2679 2160 2577

Sources: National Statistical Service and Mini.stry of Finance

Tabin L: EXTERNAL PUBLIC DEBT OUTSTANDING AS O' DECEMBER 31, 1969WITH MAJOR REPORTED ADDITIONS CONTRACTED

JANUARY 1, 1970-DECE,.BER 31,1970/a(in thousands of US dollars)

Debt Outstanding ReportedDecember 31, 1969 Major additions

Source Disbursed Including January 1 -only undibursea December 31, 1a70..

TOTAL EXTERNAL PUBLIC DEBT 6 6952f6 769,,6Oo 245,612

Privately held debt 393j8? !L6L89 147,766

Publicly ssued bonds 174 146 17 4 18 -Suppliers1 45,810 TB' -1,971

Austria 3Belgium 626 2,410Canaa _ 1, R70

France 7,182 7,409 1,397Germany (Fed. Rep. of) L.138 26.175 3.820Italy 1,154 1,154 137Japan 1,oh 9,585 1,112United Kingdom 3,000 4,577 1,958United States 27,613 28,00 43,548Others 1,050 1,050 -

Financial institutions 168,798 179,255 95,795nuus i. - - -Le UCanada 17,083 17,083 -F~rance'~ - - ,000

Germany (Fed. Rep. of) 64,208 74,604 8,000Italy 85h 854 -Switzerland 3,931 3,931 14,000United Kingdom - - 42,500United States 53,624 53,685 24,167Others 29,098 29,098 -

Privately placed bonds -5,121 5,121 -

organizations 61,691 82,538 33,800

CuncUi.l of Europe 5,( ,241 -

Eurofima 2,270 2,270Euroan Tnrres+men+ Bank if EfQ 0AfTRD 5,417 12,476 33,800

Loans from governments 203,959 240L474 640)46BelgiumCanada - 7,L0Czechoslovakia 45 45 -France 12,017 16,821 59,328Germany (Dem. Rep. of) 199 199 -Germany (Fed. Rep. of) 119,950 4r2,302 -italy 4,363 4,363 -Ile V104 -LMLIUQ UCV Uf4

Rumania 157 157 -United States 6c'7 6,13 h,2c'U.S.S.R. - 1,50 6

/a Debt-repayable- in--foreign currency with an original or extended maturity of oneyear or more.

/o Includes $",lyu,U unsettled debt,but does not include 43,U0,zo4 unsettlea pre-wardebt.

opening of credit with the Central Bank. Thus, amount shown as disbursed does notusually coincide with value of delivered Lmods.

/d Preliminary data; repayments assumed to be equal annual installements with 2 yrs.grace.

Source: IBRD, Statistical Services Division, Economics Department.

Table 4.2: ESTIMATED FUTURE SERVICE PAYMENTS ON EXTERNALWnmT TrI nirw orTrr.qTANTWrr TNCLUT)ING UNDISBURSEDAS OF DECEMBER 31, 1969 AND MAJOR REPORTEDATnT-TnHrnu mrRACTED JANUARY 1-DECEMBER 31,1970

(in thousands of US dollars) Page 1

DEBT UUTSTCurEm nr DruTnni PAvuNTq nURiNt PERTnn

INCLUDING AMORTI*wfAo IanTnocrp 7ATTn#J TmTFoFC1' TfTAi

TOTAL EXTERNAL PUBLIC DEtT

1970 755P514 40s397 290622 700019

197l 729P006 40096r 35*4 234 4V91972 8760582 99#661 380777 138s438

1v73 77363r 122o26i 35P64 15704*1974 648P233 849077 29P908 11309851975 561#139 r5*43l 253013 1001730

1976 4820809 58P797 21P331 8001281977 421#221 57#227 1799'f 75#2241978 361#304 46P543 14#754 612971979 312P165 41#262 12#277 53o5391980 268P397 32s592 11'953 44#5451981 2339383 269900 12'i01 49'0011982 204s141 19,9-90 10P23 30,8031983 181s994 17#630 9P845 27J6761984 161P870 15,926 6,195 22#1211985 143P822 13#131 4568 17,6991986 128P635 19089 3P945 15#0331987 115P556 9P331 3P365 12,6961988 104P298 7,032 2#964 909961989 95'401 5,032 2*652 7P683

Nt*T-nlwlp., mprtrianp nn n1l AAht li.q+pl In Tn*bln li-I1

with the exception of the following:Total h A7 ry0

Unsettled debt: ,150,000Pub1icly issued bonds O,036,000Privately placed bonds :L,11l,0o

Debts for which repaymentterms are not available: 5,937,000

Suppliers 10,0uu 0UPrivately placed bonds 778,000Loans from governments

France 3,072,000Germary (Fed. Rep. of) ,005,000

Source: IBRD, Statistical Services Division, Econcaics Department

Taler.2: ETATD FUUXR ZrZLVIE PA.1MlflNTb N lXTEItmjL PUj-l DEBTOUTSTANDIWO INCLUDING UNDISBURSED AS OF DECEMBER 31, 1969A Vn "XA T^no nrn n " AT'1- T-r~QC ~-AD V XuAJ ruaRELPT AJ.JLVI ONlrATlED 'JANUAtY -.

DECEMBER 31, 1970kin thousands of US co-Llas )i

0E6T CUTST(6EGIN UF PERIOO) PAYMENTS DURING PERIOD

INCLUDING AHORTIYEAR UNDIS8URSED ZATION INTEREST TOTAL

PRIVATELYWHELD DEBT

1970 437p659 23>724 17#487 41>2121971 529>97 30Q 2082 2

1972 495>872 75>459 22>325 97#7851973 417p129 93>923 19,016 112>9391974 320>062 43>343 14>157 57,499

1976 238>137 27>772 9>895 37>667

1977 207V57 2616 2 34>290

1978 178p718 17s950 6>432 24#382

1979 158-172 14>134 5345 19479

1980 141p532 9>58u 49506 14ø0871981 129530 8,!1 .3,909 1,0261982 119>071 3,744 3p543 7>2871983 113,061 3p801 3p330 7>1311984 107j066 39860 39117 6>9781985 101p082 3>921 2*905 69826

1986 95p105 3>723 2>692 69415

1987 89>391 3>142 2p479 5.6211988 84>322 2p563 2p334 4.897

1989 79'894 2.631 2p211 4>842

LOAN4S FROM INTERNATIONAL ORGANIZATIONS1970 82'538 39163 490841971 113>175 3>882 597621972 109>293 5387 6.917 2301973 103>906 6>486 6,668 13jp1541974 97>420 7>518 6>263 1397811975 89,902 8>435 5s772 14p2081976 8146 9P510 5p215 14>7251977 71>956 9P840 4>590 14>4301978 62p116 9#625 3,953 13e5781979 52p491 9>099 3p334 12>4331980 43>392 7>997 2>759 10>7561981 351395 7,166 2P247 9>4131982 28>229 5>526 1,815 7>3411983 22p704 5f610 1>463 7*0721984 17>094 4,494 1p110 5p6041985 12p600 3>455 827 4,2831986 9>145 3>137 600 3p7371987 6.008 if958 385 2.3431988 4>050 1>255 271 1>526

n9A 2 T357 1p524

Source: IBRI)

Table )4.2: ESTIMATED FUTURE SERVICE PAYMENTS ON EXTERNAL PUBLIC DEBTOUTSTANDING INCLUDIlG UNDISBURSED AS OF DECERBER 31, 1969

AND MAJOR REPORTED ADDITIONS CONTRACTEDJANUARY 1 - DECEMBER 31, 1970

(in thousands of US dollars) p. .

TKRD

1970 12,476 426 616 1#0421971 45*850 875 I988 2#8631972 44P975 l0825 3#032 4P8571973 43P150 2P420 2P944 5.3641974 40s730 3050 2P789 5.8391975 37.680 3p650 2s579 6s2291976 34,030 4P595 2,316 6,9111977 29P435 4*770 1s995 6#7651978 24,665 4395 1.673 6#0681979 20P270 4.030 IP376 5P4061980 16,240 3.030 I108 4.1381981 13s210 2*040 909 2#9491982 11s170 1*395 781 2s1761983 9P775 1#245 685 1#9301984 8P530 1P070 599 1s6691985 7P460 1*100 521 I6211986 6s360 1.140 441 1#5811987 5.220 10170 358 1.5281988 4s050 1*255 271 1.5261989 2s795 1#345 179 1s524

LOANS FROM GOVERNMENTS

1970 235P317 13.510 8.050 21P560

1971 205P^53 i 4.436 8W.3 23 -

1972 271.417 18.815 9j535 28P350

1973 252,602 o21852 iAlvvu 3,5Ar

1974 230P751 33P216 9,488 42P704

1975 197p534 34P329 'FC ".#

1976 163.205 21#514 6j)222 27736

1977 141,691 21.222 5o28 3 &WR.0

1978 120,470 180967 4j,370 23s337

1979 101P502 18,029 3v59o civue.

1980 83.s473 15.015 4688 190702

1981 68,458 11,618 5>945 170o1982 56s840 10s710 5,P465 16#175

1983 46,130 8,419 5P052 1304r21984 37P711 7.571 1o968 9o539

1985 30s139 5#754 836 6P591

t986 24s385 40229 652 4.881

1987 20s156 4*231 501 4.T31

1988 15#925 3.214 356 3.572

1989 12P712 0055 262 1#318

Source: IBRD

Table 4.3: FAST TRANSACTIONS ON EXTERNAL PUELIC DEBT 1965-1969

Debt Repayable in Foreign Currency

(In thousands of UI.S. dollars)

Dbt outtndn ta~

Inudi lbwod I Undlö Author- ]1iaburse- Pa;nRGTear undis. ony mursd isation ment uAt. Interest Total

GRAND TOTAL

1965 501206 403460 97746 40132 63314 17026 10581 276071966 515055 440491 74564 46660 77980 23152 13490 366421967 536172 492928 43244 61412 63493 35123 15710 508331968 536461 495296 4'1166 111020 85334 32415 20127 525421969 613029 546176 66852 174659 I35606 33868 26071 59941970 769600 659526 110074

TOTAL PRIVATELY HELD DEST

1965 291871 288371 3500 15846 19000 12004 6473 184811966 286450 286104 346 41543 39906 13437 8395 218321967 312163 310180 1983 26983 24579 21912 8459 303711968 291236 286850 4386 83335 59131 17290 9922 272131969 3 322 5A9 , Q 1^5805 R4t1 19886 15AI8 35SSn4

1970 446589 393877 52712

INS FM INTERATIONAL ORGAIZATIONS1965 28415 11223 17192 12904 13367 195 567 7611966 41126 24397 16729 15000 17412 338 8n7 11451967 55792 41475 14317 15444 10367 726 2914 36411968 rUsr 51111 19396 12300 5630 1411 3272 46831969 81396 55330 26066 3000 8358 2215 3619 58351970 82538 61691 20847

IBRD

1965 - - -l -1966 - - - - -1967 - - - - - -1968 - • 125067 u

1969 12500 • 12500• 5441 24 125 1491970 1A2476 5417 7059

LOANS FROM GOVFRNMENTS

1965 180920 103866 77054 11382 30947 4823 3542 83651966 187479 12999n 57489 -98A 2n66 9377 n.2 13661967 168217 141272 26944 18985 28546 12484 4337 16R221968 174718 157335 17383 15386 20573 13713 6933 206461969 176391 .164194 12196 65854 42836 11767 6834 186011970 240474 203959 • 36515

a/ Debt repayable in foreign currency with an original or extended maturity of one year or more.Source: IBRD, Si aserAio n4i, r-n-ic T

Table 5.1: REVENUE AND EXPENDITURE OF CENTRAL GOVER NENT

1965 1966 1967 1968 1969 1910 19r1l

I. Ordinary Budget

1) Revenue 28.2 34.1 38.7 44.8 50.4 57.5 63.2a) Dect _e: IA -4$ 7 A7 A-2 Q1 11 1 1I11

b) Indirect taxes/a 20.4 24.7 28.3 32.1 36.6 41.0 44.8n) StatA 0nternrjes 1.7 1.8 1.9 2.0 2.3 2.6 2.0d) Other revenue 1.5 1.9 1.8 2.5 2.5 2.7 3.2

2) Expenditures 28.6 32.0 38.4 42.8 47.7 54.6 59.3Current payments 28.0 31.5 37.7 42..6 47.5 53.8 58.9NATO common works 0.6 0.4 0.7 0.2 0.2 0.8 0.4

Balance - 0. l .1 0.3 2,0 2.7 2.9 3.9

II. Investment Budget

1) Revenue from Governmentinvestments 1.3 0.9 1.6 0.8 0.8 0.9 1.2

2) Investment expenditure 5.4 7.1 7.2 9.3 10.8 12.9 1.0

Balance - 4.1 - 6.2 - 5.6 - 8. 0 - 0.0 -12.0 - 12.8

Overall Balance - 4.5 -4.1 - 5.3 - 6.5 -7.3 -9.1 -8.9

III. Fixancing

1) Domestic loans 2.1 2.5 4.4 L.3 5.0 5.6 6.8a) Treasury bills 1.0 1.2 2.6 2.5 3.0 3.4 4.4b) Issue of bonds 0 0.9 1.5 1.8 2.0 2.2 2.4c) Bank of Greece loans 1.1 0.4 0.3 - - -d) Other - - - - - - -

2) Foreign loans 1.6 1.1 0.2 1.9 2.1 2.7 1.8

3) Transfers from abroad 0.8 0.5 0.7 0.3 0.7 0.8 0.4

b) NATO contributions 0.6 0.4 0.7 0.2 0.2 0.8 0.4

Total financing 1.5 14.1 5.3 6.5 7.7 8.1 8.9

a/ Including direct and indirect taxes in favor of farmers' Social Insurance Organization.

Sources: Bank of Greece, Ministry of Finance.

Table 5.2: CENTRAL GOVERNNT ORDINALRY REVENUE

(billion DracIrae)

Budget Budget1960 1965 1966 1967 1968 1969 1970 1971

Direct Taxes 2.6 b.5 5.7 6.7 8.2 9.5 11.1 1.1

Income Tax of which: 2.C 3.0 3.9 4.7 5.h 6.1 7.2 9.1Personal 1.5 2.2 2.9 3.6 4.2 4.9 5.9 7.3Company .3 .6 .6 .7 .7 .7 .8 1.2

Property Tax .2 .5 .6 .8 1.1 1.3 1.3 1.5Other Direct /a .4 .9 1.2 1.2 1.8 2.2 2.6 2.5

Indirect Taxes 10. 4. 20.4 24.7 28.4 32.1 36.1 41.0 44.8

Customs Duties 2.1 3.8 4.5 4.7 4.7 5.4 5.8 6.2Turnover Tax b 1.5 3.0 4.2 4.6 5. 1 5.6 6.3 7.6Tobacco Tax 1.8 2.8 3.,2 3.7 3.9 4.2 4.4 5.0Transactions Tax 1.9 3.5 4.-0 5.', 7.0 8.3 10.0 10.9Vehicle Duties . .1.0 1.4 1.7 1.9 2.2 2.6 2.9Insurance Funds c - 1.0 1..1 1.3 1.3 1.5 1.7 2.0Other Indirect 2.7 5.3 6.3 6.9 8.1 9.1 10.1 10.3

0ther 2.3 3.3 3.7 3.6 4.5 4.8 5.3 5.3

Total Receipts 15.3 28.2 34.1 38.7 44.8 50.4 57.5 63.2

/a Including direct taxes in favor of farmers' Social Insurance OrganizationIncluding turnover taxes on imports

Zc Including custom duties in favor of Farmers' Insurance Organizationz rj Including receipts from entrepreneurial activities of the State

Source: Ministry of Finance

Table 5., 3 CENTRAL GOVERNMFNT CURRENT EXPENDITUIE BY FUNCTIONmillion Drachmae ) Budget

Budaget1960 1965 1966 1967 1968 1969 1970 1971

Remuneration of civil servants 2929 6469 7276 8432 8755 9127 10420 11667

Remuneration of the members of Armed Forces andthe public Security Forces 2300 3666 1027 465 5564 5891 6656 7092

Pensions 1982 3216 3619 4212 4969 5881 6788 7911

Money supports, of which:Fertilizer 15 21 294 147 1 183 100 80,onsumer goods account 107 400 00 500 395 - 181 179Tobacco, currants & other

agricultural products 10D 1547 1783 2176 2721 2241 21i63 2000Railways 45B 545 576 5L6 873 1010 900 1100Other 34 175 200 200 - - -

Subsidies and subscriptions to:Communal health and insurance council 922 308 308 451 575 695 499 416Social welfare institutions 553 595 559 626 567 520 506Other subsidies - 1460 11603 1669 1666 1707 1981 2077

Restitution of amounts collected on account ofthird parties:

Municipalities and communes 315 560 560 570 595 902 1097 1080Social Insurance Agencies - 1315 1165 2303 3071 2825 3121 3213Other institutions 306 517 50o 683 923 1113 1155 101)

Public Debt 589 2053 2453 2818 3589 1785 5800 6985Expenditure for NATO participation 111 216 112 214 228 223 201 225

Works of cormmon interest with NATO 595 563 131 666 239 192 770 377Expenditure of POL-AMM and NAMFI - - 10 211 233 301 11 11Other 1179 4946 5614 7410 7824 9789 11921 13313

Total 14945 28560 31956 38415 12847 47732 51570 59277

Source: Ministries of Finance

Table 5.4 CENTRAL GOVERNMENT CURRENT EXPENDTURE BY MIISTRIES

(in million Drachmas)

Budget Kudget

1L960 1965 1966 1967 1968 1.969 1970 1971

Parliament 79.0 150.6 176.0 95.2 26.9 :30.4 314.9 52.9

Prine 1inister's Office - - - - 5214.7 686.3

Ministry to tie Prime Minister 114.0 385.2 4o6.3 492.8 782.1 311.8 4136 359.6

inistry of Finance 4375.0 7967.9 8820.1! 101014.7 12127.7 2h4691.2 16183.4 19860.9

Reserve - - - - - 3000.0 2050.0

Ministry of Coordination 113.0 236.5 22:3.0 269.1 259.1 257.6 327.3 406.8

Ministry of Foreign Affairs 237.0 390.7 419.2 456.5 487.2 453.8 459.2 159.9

Ministry of Justice 334.0 613.9 651.0 700.6 698.5 716.3 761.0 825.1

Mtinistry of Interior 145.0 722.2 705.1 742.5 801.6 1080.8 1286.6 1298.3

Ministry of Public Security 1038.0 1838.6 1954.0 2449.2 2803.2 3020-7 3254.8 3495.0

MtLnistry of Public Works 300.0 413.0 530.8 504.5 755.8 1165.1 12o8.3 1289.9

Ministry of Transport 330.0 528.0 60'.1 73.3

Ministry of National Educationand Religion 1513.0 3368.4 3828.1 4267.5 4666.4 4802-3 5289.1 5943.8

Ministry of Commerce 287.0 515.2 536. 655. 557.0 218.8 L23.1 127.3

inistry of Industry lt2.0 136.4 10.7 170.2 167.3 178,6 175,8 224.1

Ministry of Labor 47.0 25.3 31.6 36.8 37.1 39.2 59.1 6o.7

Ministry of Agriculture 409.0 2377.8 3010.2 3518.6 34o4.7 10263.6 330114 3002.1

Ministry of Social Welfare 1028.0 36o0.1 4103,7 5200.2 606.0 6136.8 65314.6 7075.8

Lnistry of Hygiene

1ILnistry of National Defense 34o&o 4522.7 5250.3 7193.3 7983,0 9528.9 9538.1 10136.0

iLnistry of Mercantile Marine 81.0 1-1i.1 126.1 158.0 171.7 206.6 217,3 275.7

Ministry Northern Greece - - - - 5.6 18.0 17.6

apenditures for Works of comon 114350.0 27997.3 31524.9 37768.7 2608.7 5411 .0 53800,0 58900.0

interest with NATO 595.0o 563.2 430.8 666.1 238.6 192-5 770.0 377.0

Total 14 5960 28560.5 31955.6 381424.9 12847.3 51796.5 51570.0 59277.0

a/ includes 6.8 billion for moratori9. on farmers debts.

Source: Ministries of Finance

TABLE 5.5: CURRENT REVENUE AND EXPENDITURE OF GENERAL GOVERNMENT La

(IN BILLION DRACHMAS)

1960 1961 1962 1963 1964 1965 1966 1967 1968 11969

UR! jEi U 20.7 23.9 27.0 30.2 34.3 39.6 47,o 53.0 63.8 67.5

DIRECT TAXES ON HOUSEBOLDS 7.3 8.3 9. 4 10.3 11.4 12.9 15.6 18.0 20.6 23.6

SOCIAL INSURANCE CONTRI.BUTIONS (4.6) (5.3) (6.4) (7.1) (7.8) (9.3) (10,9) (12.4) (14.0) (15.8)

OTHER (247) (3.0) (3.0) (3.2) (3.6) (3.6) (4.7) (5.6) (6.5) (7.8)

DIRECT TAXES ON CORPORATIONS 0.4 0.5 0.5 0.6 0.7 0.7 0.8 0.9 1.0 0.9

INDIRECT TAXES 11.6 13.6 15..2 17.5 20.3 23.6 28,.3 31.3 36.3 39.8

INCOME FROM PROPERY ANDNTERPRISES 1,1 1.2 1.5 1.6 1.7 2.2 2.2 2.5 2.9 3.2

CURRENT TRANSFERS FROM RESTOF WORLD 0.3 0.3 0.4 0.2 0.2 0.2 0.1 0.1 .

U F PDIUE 18.1 19.8 22.1 25.5 29.9 36.0 41.3 50.0 53.7 58.4

ON GOODS AND SERVICES 11.8 12.6 13.8 15.0 17.7 t*.5 23.2 27.8 29.2 33.2

DEFENSE (4.7) (4.9) (5.1) (5.3) (5.6) (6.5) (7.4) (9.9) (11.3) (13.2)

CIVIL (7.1) (7.7) (8.7) (9.7) (12.1) (14.0) (15.8) (17.9) (17.9) (20.0)

SUBSIDIES 0,4 0.5 C.5 0.8 1.3 2.0 2.8 2.8 3.1 2.5

TRANSFERS TO HOUSEHOLDS 5.5 6.2 7.2 8.9 10.0 12.1 13.8 17.7 19.4 20.4

TRANSFERS TO REST OF WORLD 0.1 0.11 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2

INTEREST ON PUBLIC DEPT 0.3 0.4 0.5 0.7 08 1.2 1.3 1.5 1.8 2.1

PUBLIC SAVING3 2.6 4.1 4.9 4.7 4.4 3.6 5*7 3.0 7.1 9.1

/a National Accounts Basis

SOURCE : NATIONAL ACCOUNTS DIVISION, N.S.S.G.

TABLE 5.6 : CURRET EXPUDITURES OF THE CENTRAL GOVERKNENT /a

(IN BILLION DRACHEAS)

1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 b-------------------------.---------------------.---.------.-----....-.

GOODS AND SERVICES 9.6 1093 1089 11.6 13<g7 1599 18,0 21,9 23.2 27,0

ARMED FOROEB PAY ANDALLOWANCES C3,4) (3.6) (398) (4,1) (4.5) (5.0) (5,6) (6.6) (7,8) (8.5)

MILITARY EQUIPMEKT ANDCONSTRUCTION (1.3) (1.4) (1.3) (1.2) (1.1) (1.5) (1.9) (3.4) (3.5) (4.8)

CIVIL SERVANTS WAGES ANDSALARIES (3.9) (4.2) (4.6) (5.2) (6.2) (7.2) (8.0) (9.4) (10.0) (11.0)

OTHER (1.0) (1.1) (1.2) (1.1) (1.9) (2.2) (,.5) (2.5) (1.9) (2.7)

INTEREST ON THE PUBLIC DEBT 0.3 0.4 0.5 0.7 0.8 1.2 1.3 1.5 1.7 2.1

SUBSIDIES 0.4 0.5 0.5 0.8 1.3 2.0 2.8 2.8 3.1 2.5

CURRET TRANSFERS TO REST07 WORLD 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2

CURRET TRANSFERS TO OTHERGOVERNMENT o.8 1.2 1,4 1.9 2.5 2.9 3.1 3.6 5.3 5.4

CURRET TRANSFERS TO PRIVATESECTOR 1.4 1.4 1.5 1.6 1.9 2.4 2.2 2.6 3.1 3.2

TOTAL CURRENT EXPEDITURES 12.6 13.9 14.9 16.7 20.3 24.5 27.6 32.6 36.6 40.4

/a National Accounts basis /b_ Provisional

SOURCE : NATIONAL ACCOUNTS DIVISION, MINISTRY OF COORDINATION, (N.S..)

TABLE 5,7: CURRENT REVENUE OF TE CENTRAL GOVERNMENT /a

(IN BILLION DRACHMAS)

-- --- --- ---- - --- --- - -- - - - -I- -- -- - --- - - --- -- - - - - - - -- - -- - -- - ----- -

1960 1961 1962 1963 1964 1965 1966 1967 1968 1969/b

DIRECT TAXES 2.4 2.7 2.9 3.1 3.8 3.6 4.8 5.7 6.6 7.5

INCOME TAXES (2.1) (2.4) (2.5) (2.7') (3.3) (3.1) (4.2) (4.93 (5.9) (6.6)

SUPPLEMENTS AND FINES (0.3) (o.3) (0.4) (0.4) (0.5) o.5) (o.6) (0.0) (0.7) (0.9)

INDIRECT TAXES 10.2 11.3 12.4 14.4 16.5 19.3 23.5 26.1 30.8 33.6

DUTIES (4.0) (4.5) (5.1) (5.5) (6.4) (7.8) (9.1) (9.7) (10.4) (11.7)

TURNOVER TAX (1.3) (1.5) (1.6) (2.0) (2.3) (2.7) (3.7) (4.0) (4.4) (4.9)

INCOME FROM MONOPOLIES (0.4) (0.4) (0.4) (0.5) (0.5) (0.5) (0.5) (0.5) (0.5) (0.5)

OTER (4.5) (4.9) (5.3) (6.4) (7.3) (8.3) (10.2) (11.9) (15.5) (16.5)

INCOME FROM PROPERTY ANDENTERPRISES 0.3 0.3 0,4 0.3 0.2 0.5 0.3 0.3 0.2 0.2

CURRENT TRANSFERS; FROM RESTOF WORLD 0.3 0.3 0.3 0.2: 0.2 0.2 0.1 0.1 -

CURRENT TRANSFERS FROM OTHER0OVERNMENT 0.1 0.1 0.2 0.3 0.3 0.3 0.3 0.3 0.4 0.3

CURRENT TRANSFERZ: FROMPRIVATE SECTOR 0.3 0.4 0.3 0.3 0.7 o.8 0.8 0.7 1.1 0.8

PURCEASES OF GOODS AND SERVICESBY PRIVATE SECTOR 0.3 0.5 0.5 0.2 0.2 0.3 0.3 0.3 0.3 0.4

TOTAL CURRENT REVENUE 13.9 15.6 17.0 18.8 21.9 25.0 30.1 33.5 39.4 42.8

71 i U1---------«----L---- -'--P-,---i--a---------------------------------------------------------- -----------------------/a National Accounts basis /b ProvisionalSOURCE : NATIONAL ACCOUN~TS DIVISION, INISTRY OF COORDINATION, (N.*S.*S .G.).

Unhin1 4 1 MASTkV AITDr)TTAQT rKXnTWV

(hilinn~ - dahmas)

1960 1965 1966 1967 1968 21969 1970

Money supplyNotes and coins incirculation 10.5 23.3 26.1 33.4 33.1 35.4 38.9Sight deposits a/ 5.0 9.1 9.8 l.0 12.1 13.5 15.5

Total money supply 15.5 32.4 35.9 43.4 45.2 49.0 54.4

Quasi-money b/

Camercial Banks 8.1 16.4 20.7 22.6 30.3 36.3 45.4Postal savings barks 9. 7.7 Q-7 I 7 1)-1 17.1 1 -A

Other institutions 0.4 1.2 1.5 1.8 2.2 2.6 3.1

Subtotal 10.8 25.3 31.9 35.1 46 6 56.0 69.7

Time deposits 1.1 5.0 5.9 7.0 8.9 12.3 15.9

Subtotal 11.9 30.3 37.7 42.1 55.5 68.3 85.6

Others c/ . 9.1 10.4 10.9 11.5 14.0 16.3

Total quasi-money * 39.4 48.1 53.0 67.0 82.3 101.9

Total money and quasi-money . 71.8 84.0 9o.4 112.2 131.2 1.5.3

Savings ana UMe depoiutsGNP 11.3 17.1 19.2 19.9 24.4 27.1 30.5

a/ Government deposits with the Bank of Greece are not included.b/ Comorisin savinms and time deosits of individuals and nrivate enternrises.

as well as time deposits of public entities.c/ As defined in IFS.

Source: Bank of Greece

Table 6.2: FACTORS AFFECTING THE MONEY SUPPLY

(Million Drachmas)

TdJ- ITo-Y

Changes in: 1966 1967 1968 1969 1970

1. Public Sector 5,581 2,696 7,289 8,834 1,436'I I A --.. -- . ~ r, fN nt. -1 -77 4 . n Q 0 . n ^''.J I I0I.L UVULorimallu ?V714 .LjI (U u$JLu7 Uj,IJr ~ j7 1-L

a) Loans and advances 3,881 -286 1,430 3,591 -3,064b) Treasury bil2 ana bouns 1%4rc 2,UU 3,12 3,98 4,uuc) Deposits and other accouts -1,225 -1,000 - 228 -873 -1,580a) winarawals out of counter-

part funds and foreign loans 986 1,056 2,146 2,143 2,939

2) Public entities -342 -97 -268 1,431 -2,768

3) Public enterprises 829 1,015 1,088 1,h22 1,233

II. Public Sector -1,854 6,872 -5,061 3,261 5,0651) Loans, advances and securities 7,164 10,920 8,559 16,527 18,5242) Deposits -9,018 -4,054 -13,720 -13,266 -13,459

a) Savings -6,572 -3,252 -11,504 -9,3060 -9,51b) Time -1,197 -1,o6i -1,862 -3,156 -3,077c) Restricted -1,249 259 - 354 - 744 -801

III.Foreifn Sector -1,594 -1,007 -1,379 -2,578 -2,7461) Foreign exchange reserves

and clearing account /a 970 404 2,069 971 2,0502) Foreign exchange liabilities- -2,154 -1,592 -3,357 -3,449 -4,9433) Counterpart funds -410 181 -91 -100 147

IV. Other Items 1,391 -1,004 975 -5,787 -3,179

V. oney Ppply 3,524 7,557 1,824 3,730 5761) Currency 2,820 7,346 -352 2,347 -6782) Sight deposits 704 211 2,176 1,383 1,254

a) Private 246 16 1,383 809 1,020b) Public entities -85 399 704 573 387c) Public enterprises 543 -204 89 1 -153

VI. Quasi-money 9,742 4,803 15,344 15,783 15,528-1) Private deposits 9,018 L.oh 13.720 13.266 12.h272) Public deposits (entities) 724 749 1,624 2,517 3,101

A,.

VII.Total Liquid Assets 13,266 12,360 17,168 19,513 16,171'

a/ Mainly government liabilities from foreign borrowing and deposits under Law 2687/1953b/ January-October,1970

Source: Bank of Greece

Table 6. CENTRAL BANK CREDIT (NET) TO THE GOVERNMENT

(in millions of drachmas, at end of period)

1960 1965 1966 1967 1968 1969 N70

Ordinary accountsReceipts and payments accounts 482.5 467.7 422.7 488.3 463.4 1 248.7 1 213.2Consumer goods accounts Za 3 550.2 6 579.2 6 852.7 5 417.0 3 889.5 3 499.0 3 096.5

Special advances accounts 1 470'.3 - - - - - -

Advances covered by foreign aid 1 724.9 1 116.8 626.5 411.5 - - -

Advance payments for farmer's debts - - - - 2 463.2 - -

Treasury bills 25.0 597.9 336.5 657.2 322.6 501.1 12.3

Payments of goods shipped on AID account 303.1 - - - - -

Payments to internationalorganizations 1 898.8 1 974.2 2 487.7 2 487.7 2 487.1 2 487.7 3 312.7

Credits of the Bank of Greece onspecial agreements /b - j.22 6 320.,! 6 L -66.8 10 32

Total 9 454.8 12 689.7 14 869.8 15 782.5 16 244.0 19 703.3 17 988.8

Less state credit accounts I._98C2 1 477.7 2800. -1 3 106.1 4L 22.2 . 4J0

Total I 473.9 11 212.0 12 069.3 :12 623.9 13 137.9 15 581.1 12 584.5

a i.e., the operations of various agricultural price support programs, except those for tobacco, currants andsultanas, are effected through this account.

/b Including balance of loans: (a) Dr 2,200 million as per agreement of November 10, 1963; (b) Dr 500 million900 million and 1,100 million as per agreement of December 20, 1966; (c) Dr 1,250 million, 1,350 million and185 million as per agreement of September 22, 1967; (d) Dr 900 million and 300 million as per agreement ofMarch 30, 1968; (e) Dr 7049 million farmers debts assumed by the Government as per the agreement of June 30,1969 and (f) Dr 855 million as per the agreement of October 16, 1970.

Table 6.4: TOTAL OUTSTANDING BANK CREDIT TO THE ECONOMY /a

(Billion drachmas, at end of period)

1960 1965 1966 1967 1968 1969 1970

By sourcesBank of Greece 10.0 18.6 22.0 25.5 31.9 36.2 40.8Commercial banks 11.4 24.5 28.5 33.5 39.3 46.3 56.0HIDB /b 3.1 4.2 4.2 4.4 4.3 4.1 4.2Mortgage Bank 0.2 0.3 0.4 0.1 0.2 0.6 1.5Agriculture Bank 1.8 5.5 5.4 5.2 2.4 5.5 6.3Consignment and Loans Fund

Post Office and Investment Banks 1.7 5.7 7.6 9.9 12.8 17.1 :20.9Other Funds /c 1.0 0.6 0.6 0.8 0.,9 1.0 1.1

Total 29.2 59.3 68.7 79.4 91.8 11.1.0 130.8By sectors and branches

Agriculture 7.8 12.7 13.8 15.:2 13.5 15.0 17.2Manuracturing 10.9 20.8 24.2 29.1 33.8 40.1 47.3Trade 4.3 8.7 9.6 10.3 11.2 13.3 14.8Miscellaneousq 3.1 7.5 9.0 12.9 17.5 24.0 31.3

Subtotal 26.1 49.8 56.6 67.5 76.0 92.4 110.6

Public enterprises 1.0 3.4 4.2 4.8 59 7.4 8.9Public utilities 1.2 2.6 3.0 3.7 5.1 6.1 6.6Government agencies purchasingagricutural products 09 3.5 4.9 3.4 4.8 5.1 4.7Total 29.2 59.3 68.7 79.4 91.8 111.0 130.8

(Annual % increase) 17.1 12.6 15.9 15.6 15.,6 20.9 17.8

/a Excluding credit to the Central Government.7 Hellenic Industrial Development Bank.7 Government funds granted.

Source: Bank of Greece

Table 6.5: ANALYSIS OF CREDIT BY FINANCIAL INSTITUTIONS

(billion drachmas)

/2

1960 1965 1966 1967 1968 1969 1970'

By Source of Funds

Bank of Greece .9 1 22. 2 39 36.2 .

H.I.D.B. 3.1 h.2 4.2 4.4 4.3 4.1 h.h

Agricu1tural Bank 1.7 5.5 5.h 5.2 2.4 5.5 5.8

Mortgage Bank 0.2 0.3 0.4 0.1 0.2 0.6 1.0

Other 2.9 6.2 8.2 10.7 13.7 18.2 22.6

Total 29.2 59.3 68.7 79.1. 91.8 111.0 134.5

Branches

.. ./bAgriculture- Ö.7 10.2 11. 18.T 18.3 20.1 22.5

inn and .anfacuring 10.9 2 -0.8 24.2 2..7 31. .1 40.7

Trade å.3 8.7 9.6 10.3: 11.2 13. 1h.9

Domestic 2.6 5.4 6.2 7.c 8.h 9.5 11.0

Import 0.3 0.9 0.9 0.5 0.9 1.4 1.4

E-port o.6 0.8 0.9 1.C 0.9 1.2 1.5

Tobacco 0.7 1.5 1.7 1.4 1.0 1.2 1.0

Touris 0.5 1.8 2.0 2.5 3.5 4.7 6.7

Housing 1.3 3.2 4.2 6.0 9.7 14.o 17.6r3.5 8.6 10.1 12.8 15.3 18.8 23.9

Total 2Q2 59. 68._7 7QÄ 91.8 111.0 13h.5

/a Provisional/b Including goverrnent agencies purchasing agricultural products.7- Including public enterprises and public entities.

Source: Monthly Statistical Bulletin, Bank of Greece.

Table 6.6 CONSOLIDATED BALANCE SHEET OF THE COMMERCIAL BANKS(billion drachmae, end of period)

196U 1965 19u 1967 19bu 190) 19T

Assets

Cash D,3 ,5 ,7 U,T U,9 I,1 1,I

Duposits with the bank of 6rueca 1,s 2,2 4,1 U,7 4,2 4,b 2,9

FU.Lyn I3 eJ 4 ie. . 22 3.5

Trieasury billa 2.3 4.4 502 6.1 u.4 11.2 14.5

Loans and udvancus 12.4 2u.u 3I.U J7.U 42.3 50.4 Su.3

zecurities U.U 2.U 2.3 2.7 3.u 3.9 4.6

Utriur azauts Z.u 4.5 4.b 5.1 5.5 T.u 9?7

T a t a I 2U.4 41.7 49.1 53.5 bb.U d1.2 64.b

Liabilitivs

Siht !rianit 3.7 A 7.5 75 U0 9 11fi f&

bavingja duposita u.1 16.4 2U.6 22.6 3l.3 3.3 42.7

Time duposita 2.7 0.1 7.3 7.4 9.7 12.6 15.4

HRatxictud dbposits 1.0 1.7 1.7 1.u 2.2 2.5 2.L

I .3 7 A T 13 #2 -3 'I ' .

Ap.-LL, in fr lAgn"chane 4 -; Av# &U 4 4. r.u .. U .7

ank uf brcQ eavancus 1L 2.4 2.3 3.4 j.u 4.1 2.7

Uther liabilitius 3.9 7.5 U.3 9.2 9.6 12.9 16.7

T o t a I 2u.4 41.7 49.1 53.5 65.d d1,2 4.t

bource: aank of Greece

(n nArent nr annnm)

Effective PreviousRate from rate

Bank of Greece rediscount rate 6.50 Sept. 1969 6.00

Deposit ratesSight (individuals and firms) 0.75 Sept. 1966 1.50Savings (up to Drs.200,00v)=wit

Commercial banks 5.00 Sept. 1966 4.50Agricu:1tura1LpUbaks P .2p 6SVP to. 1966 4.72Postal savings banks 5.50 Sept. 1966 5.00

S J.m4v \sLuMA JunaL au .AALSmof

3-6 months 5.75 Sept. 1966 5.25A Ynnn.h.a +n 1 -4r* A - enni 19AA -74

1-2 years 6.50 Sept. 1966 6.oo2 vears and over 7.00 Sant. 1966 6.30

Lending rate sIndustry

Bills discounted - 8.00 Sept. 1966 7.50Credits for working capital 8.00 Oct. 1968 9.00

Handicrafts 8.00 Sept. 1966 7.50Import and domestic trade 11.00 Jan. 1970 10.00Exports and tobacco trade 6.00 Sept. 1966 5.50Farmers (cultivation loans)

Individuals 5.00 Jan. 1964 6.50Cooperatives 4.25 jan. 1964 65.7

Unions of cooperatives 4.00 Jan. 1964 5.50E.L L .U.L W D CLA.A ZQ%.LVJ%VroUUL. %eJW M 1e - V -

Housing construction 8.00 Jul. 1967 8.00

a/ Until September 1966, up to Drs. 100,000.

b/ In addition to interest, commission is charged as follows (percent per annum):Credits to export and tobacco trade 0.5; credits to industry, handicraft, importand domestic trade 1; credits to handicraft from the special funds under C.C.,decision 1421/1966 0.5 as from 1.10.1968; cultivation loans and loans on collateralof products 0.5 (only on loans to individual farmers). Commission is not payable onmedium and long-term loans to farmers, on housing loans and on overdue loans.

Source: Bank of Greece

Table 6.8: LIQUIDITY OF COMMRCIAL BANKS

(in billions of drachmas)

.rosa-. / .nimum V 2 Net LiquidityEnd of Period liquid reserves- liquid Total ratio in

sa sse-ts deposifc per centNet Gross

196. 7 1.6 37 17 n 1. 31197 8.7 7.t4 1.3 37.f 3.4 2.

1968 15. 10. 1 1.9f I.2 10. 30.5l

.1969. 19.1 .13.8 54.3 59.6. .9 32.0In3 n .3n .7

1970 October 22.0 16.1 5.9 69.6 8.5 31.6

:L/ Comprising cash, deposits with Bank of Greece, Treasury bilis and foreignexchange assets.

2/ Comprising compulsory deposits with the Bank of Greece and compulsoryholdings of Treasury bilis.

Source : Bank of Greece

Table 6.9: NEW SEcRITY ISSuIS

(million Drachmas)

i961 162 1969 196h 16 1966 1967 1968 1969 1970

Bonds

Government - 990 1.500 600 - 900 1.500 1.800 2.000 2.200

Public enterprises 740. 500 - 800 800 1.300 1.000 1.248 - -

Frivate enterprises - 110 22' - 123 - W0 100 73

Avu.n Iq Aray Ie,30 eI vAv% 0a"n 0 ef%n "ivy ^na v 0 IfIN1 01?

Banks 52 2 - 52 2k 42 - - 6 250

Other enterprises 87 50 38 71 246 52 39 86 72 50

Total 139 592 38 123 270 94 39 85 78 300

Grand Total 879 2.192 1.56o 1.630 1.070 2..17 2.539 3.184 2.178 2.573

Source: Bank of Greece

Table 6.10: ANlUAL YIELDS TO MATMITY OF SELECTED BOND ISSUES

(in percent)

Nominal InterestBond Issues Rab) percent Maturity L961 1962 1963 1964 195 1966 1967 1968 1969 197C

1. Finmncial Development Loans

a. 1962 series ABC 5 1977 5.81 5.65 5.77 5.72 6.73 6.64 5.69 5-28 5.4

b. 1966 series A-E 6.3 1986 7.1 7.57 7.69 7.19 7.2

II. Publie Power Corporation Loans:

a. 1958 8 1973 7.12 6.75 6.67 7.39 7.74 7.84 8.59 7.5) 7.65 7.8

b. 1962 6.3 1978 6.60 6.64 6,84 6.96 7.78 8.28 9.514 9.74 9.8

III. Coporalion Loan:

a. 1962 Patrai:i Co. 8 1970 7.93 7. 8 4 8.73 10.20 10.10 9.33 8.29 9.80 --

b. 1964 Patraiki Co. 7 1973 8.33 10 .10 9.75 9.45 9.24 9.76 9.4

Sources: Bulletins of the Athens Stock Exchange and Bank of Greece, Capital PMarket Section.

'TOhlA -11s fANY (rETP WA WYVn r.APTTAT. WRMATTA/

1961-66 1967-69nM%wn maana Unpeenit H114nn T1rnnhman PareAnt

Privt-e_- 24 A n 9o 72

,grica1tme - U/2Industry and Mining 9.78 35 6.91 19

of Stooks and Bonds) (1.5) (5) (0.3)

Tourian 1.52 5 2.60 7

Housing 3.68 13 11.13 31

Other 1.67 6 1.83 5

Public Sector 5.69 20 5.79 16

Local Authority Projects 2.63 9 2.61 7.ELectrification, etc. 3 .v 11 3.18 9

Total 28.05 100 35.52 100

a/ Estimates of new loans and purchase of shares and bonds by the bankingsystem

b/ Including animal husbandry and fishery

c/ Including agricultural industries

Source: Annual Reports of the Bank of Greece

Table 7.1 LAND CLASSIFICATION IN GREECE

MIllionHectares Percent

Tntal A ra TT.1 1002

Frm Tand8 29Pasture Land 5.3 6V^-.s+ T "A 'I QNon-Productive Land 1.5 12

'MIPO T AB%r%tTTTY' A Mr^ SXIUAu ~LJU.A'.dLL

LOTA riil 1 RanoAV

Field Crops 2.o 69Vineyeard 0.23 6Live Groves 0.47 3

Citrus 0.-0 1Deciduous Fruit 0.11 3Fallow Land 0.30 8

CIASSIFTCATION OF FIELD CROPS

Crop / Irrigated /cCategory Area Percent Area Percent

Total '.0 100 A71 100

Annual CroDs 7 'A rL Im AATree Crops (Plantation) o.65 0.12 17Yeean+lhe and

Horticultural Crops 0.10 3 0.08 11

included) 0.22 6 0.02 4

a including inland -vaters, barren and buts areas

/b Total Sarm land minus fallow land

/c Million hectares

Source: Ministry of Agriculture

Table 7.2: CROP AREAS

('000 ha)

1960 1965 1967 1968 1969 1970 '

Wheat 1,142 1,123 937 1,027 1,010 920R%rtPv 181 231 390 352 311 343

Maize 211 147 139 137 147 160

Oats 128 125 113 104 96 77

Rice 14 22- 18 21 20 16

Others 17 15 11 8

ood L 12 70 72

Industrial CronsTobacco 91 136 126 108 101 105

Cotton 165 140 137 140 152 132

Sugar beet Nil 16 16 17 22 25

Feed ana roder,Crops

VFed Legvm- - 63 54 48 38

Cereal Fodders 51 38 I 36 33 31 31Lucerne 75 140 fe 158 171 178 200Other Ray Crops 192 -182 Lo 177 156 155 132

Vegetables etc.PotatoesTomatoes 27 27 28 29 29 31other vegetables 52 69 71 69 69 70Melons 28 31 36 36 34 33

/a Provisional7Z 1961

Eoutce: Ministty of Agriculture.

Table 7.3 CROP YIELDS - NATIONAL AVERAGES

(tons, per ha)

A9OU 1965 197 1968 1707 9(Provisionalj

Wheat 1.28 1.77 1.97 1.47 1.73 2.14Barley 1.08 1.78 2.15 1.38 1.70 2.27Maize 1.25 2.03 2.42 2.74 2.92 3.31Oats 1.07 1.41 1.46 1.01 1.24 1.40Rice 3.68 4.69 5.12 5.18 5.08 4.83Others 0.93 1.12 1.13 0.90 0.93 1.00

reau Lep;unes . . 1.42 -L30 L36 1.3

Industrial Cro,s'Tobacco (o) /1 0-75 0.95 0-86 0-75 0.68 0.86.Tobacco (b) T, Nil . 2.43 2.80 2.85 2.36Sugar beet N i 1 41.31 56.39 39.56 47.41 56.26Cotton /2 1.13 1.43 1.92 1.49 2.06 2.36

Feed nd rodrer

Cereal hay 3.23 2.78 2.90 2.72Lucene c, n KO ..0 a. 1

Other lI'.y Crope 2.70 3.20 3.02 2.59 2.68 2.91

Ve.metables, etc.Potatoos 10.30 12.00 14.19 13.67 14.00 14.78Tomatoes 16.30 20.40 24.58 25.95 28.69 33.32Other vegetable- 11.40 11.90 11.62 11.48 11.83 12.38lIPlous 13.80 16-20 19.78 18.80 18.58 19.91

Notes: 1/ 0, Oriental leaf; (b) burley2/ Seed cotton

Source: 14inistry of Agriculture

Table 7.4 CROP OUTPUT

( '000 tons)

1960 1965 1967 1968 1969 1970

1,692 1,989 1,848 1,514 1,752 1,970

Barley 232 406 839 487 -778

Maize 281 298 338 375 429 530VA 177 165 15 119 107

Rice 55 105 91 108 103 79aM.. 20 13 -10 8

Paod . 108 95 95 98

Indmstial& CronsTobacc;3 (rienta.) 61 113 105 79 66 86

Cotton 184 -200 264 210 313 282899 4A; 1.027 1-450

Tobacco (Burley) 10 9 12 13Olive Oil 79 191 19h 1c), 156 190

Feed and 'odder

reed Legenes 71 52 49 45

Cereal rodders 117 93 90 90

L-merne 579 959 1,405 1,480 1,5718 i,ocOther T1ny Crop3 316 477 535 403 .416 384

Potatoes 425 589 721 648 717 801Tnnntiln 455 -548 678 747 827 1,021

Other vegetables 825 792 816 867

I'sp-lonz 375 509 718 679 633 65)

FruitsCurrants and sul-

tanas 124 170 147 187 174 165Citrus 269 395 304 4, 2o5 JJuApple 90 166 178 192 194 207Peaches 66 93 114 144 136 158Pears 69 91 83 110Table and Wine graDes * 655 710 741 760Table Olives 21 46 52 45 47 42

Source: Ministry of Agriculture

Table 75 L,VETyC POL N 1965 - 1969

( 100 Heads)

1969 index

1965 1966 1967 1968 1969 (1965-100)

Sheep 8, 338 8,200 7,919 7,804 7,449 89

Cattle 1,085 1,092 1,093 1,078 1,006 93

Goats 4,007 3,836 3,790 3,895 3,943 98

Pigs 637 644 64,0 640 568 89

Pniitry 19,770 23,654 22,7313 23,408 23,952 121

Source Ministry of Agriculture

Table 7.6 OUTPUT OF LIVESTOCK PRODUCTS, 1966-1970

('000 tons)

1970 index1966 1967 1968 1969 1970 (1965=1oo)

Beef and veal, 63 72 79 84 86 136

Sheep and goats 89 86 85 86 88 102

Pork 42 42 42 47 58 135

Poultry 36 46 51. 58 61 18.5

Other 3 2 2 3 3 100

Total Meat 233 248 259 278 296 133

Milk 1,223 1,296 1,263 1,309 1,322 116

Butter 6 8 7 7 7 90

Cheese 116 122 116 116 127 116

Eggs 88 93 103 100 101 123

'Aurce: Ministry of Agriculture

Table 7 7 uu m?oAT

1965 1966 1967 1968 1969Iillion Drachmas

Wheat and Wheat Flour 41 29 14 224

Maize 323 537 536 265 462

Barley 262 129 4 - -

Rice - 31 32 41 30

Potatoes - 39 104 55 88

Lentils - 30 32 46 60

Bananas - 48 85 140 911

Linseed - 57 27 54 47

Sugar - 134 146 187 128

Cotton - Raw 61. 165 199 229 368

Other Vegetable Products 1,593/a 690 679 625 1,039

Beef - '777 933 1,173 1,181

lamb Meat - 831 777 778 752

Poultry Meat - 199 166 114 95

Pig Meat - 7 13 90 19

Liquid Milk .35h 659 1497 533

Cream - 94 89 --73 69

uner Meat and Dairy Prohucts zou,a ±,>>u 1,1U) ygy 1,353

ToTA 5,460 5,513 5,425 5,326 6,5h2

/a Including all listed comodities

Source: Ministry of Agriculture

Table 7.8 EXPORTS OF AGRICULTURAL COMMODITIES

1965 1966 1967 1968 1969

C.nn/ 817 123m 1,036 902

Sultanas and Currants 1.277 1112 1.15 1.057 1.299

Hides and Skins 359 395 349 406 498

Olives 230 308 248 301 275

Citrus 365 434 513 538 638

Peaches 152 166 241 206 228

Apples 65 29 17 8 13

Grapes 112 77 85 116 178

Figs 73 63 61 62 .64

Wines 165 174 167 207 262

'Tomato and Tomato Paste 29 35 72 100 227

Gwr (Mastic) 36 40 .35 40 .46

Olive Oi 66 138 590 769 240

'Wheat and.1-heat Flour - 870 761 278 93

Cheese 37 28 31 27 55

Otbers 1535 596 1,001 713 858

TTAL 7,1489 8,831 10,635 8,860 8,957

Source: !Tnistry of Agriculture

Table 7.9 ArRITRAI -TP'O'0-AN-,UBSIDIES

(a) Intervention Prices: Drs,lkg

1969 1970

Wheat:soft 2.60 2.60

Wheat:hard 3.20 3.20

!Weat:hard for seed 3.70 3.70

Barley 2.40 2.60

Maize:Hybrid 2.80 2.80

Rice 3.20-4.20 3.20-5.00

Kidney Beans 6.00-8.00 6.00-8.00

Lentils 8.50-9.00

Chick Peas - 7.00-8.50

Sultanas 7.10 7.10

Currants 7.00 7.00

Olive Oil 22.50 22.>U

Dried Figs 3.20-5.50 3.2a-35u

Source: MLnistry of Agriculture

Table 7.9 (con'd)

Iu TuNrrav mni AnuT%D DtTf' QIVt-T) AXM AQrA TMIV'TTT7rU J ±4%JLuJ17 I.tLV j. I 16 '" aVI S 11 -- - -

Budget Provisions(million dr.) Amount of Suport or Subsidy

1969 1970

Cotton 420.0 410.0 1.40 drs/kg

Cotton Seed 29.7 30.0

Sultanas) 1.90 drs/kg) o.0 469.0

Currants) 2.00 drs/kg

Dried Figs 25.0 20.0 1.00 - 1.50 drs/kg

Citrus 62.0 94.0 0.20 - 0.30 drs2/kg: tosupple-ment. market nrices

Wheat and Barley 3h.0 16.0 1969: 30 drs/str to growers of8-4O str. of wheat or barley inmountain areas. 1970 barley only

Wines 47.0 47.0 0.50 - 1.00 drs/kg

Table grapes 19.0 20.0 0.30 - 0.50 drs/kg

Mastic 3.0 3.0 10.0 drs/kg

Onions - 1.0 0.50 drs/kg

Maize:Hybrid 35.0 40.0 100 drs/str- area-incentive paidonly nn hvhrid maize crown aq q

second crop

Cow's milk) 39.0) 0.40 - 0.70: direct supplement) ) of market prices

Cow's milk) 10.0) 55.0 0.15 drs/kg bonus for quality

Cow's milk) 6.0) 1.80 drs/kg for milk used inmanufacture of condensed milk

Tobacco 452.0 40U.0 7.7 drs/kg in 19069 and 4.7 drs/Kg

in 1970 as income support

1,641.7 1,605.0

1/ 1 hectare = 10 Stremmas (Str).

Table 7.9 (Con'L

1-1 CTITTTr-Q nm pin, TM, AMO 0A, DT3nnInT -Prn,T

Mill. Drs.

1QQ 1070

A n.- n-1 +, r k nm-; InUaVLd d .ft6&.C..

Plant protection chemicals 3.6 5.6 30-40% of costV~ I-AUJILLU'l-LO, U 1, _' ;)V .2.L .)2.U V/VX UJ L

For~~~~U cerea and fodde crop _)U/ U- Z

For industrial crops 26.7 16.5 30-50% of costFor essential oil production 2.0 2.0 25->L of cost

nimprovea Seed t0. yu.u U.> - 0.2v Drs/Kg

Fruit trees and vegetables

Tree and vegetable crops 0.4U o5.U 30-Ol cost of greenhouses,nursery stock,spray equipment etc.

Vineyards 10.0 10.0

Livestock

Veal production 121.3 90.0 1.5-2.0 Drs/kg foranimals slaughtered atliveweights of 300/400kgand over. Abolished1.9.70

Pig production 5.5 8.o 1.50 Drs/kg for animalsslaughtered at 90/110kgliveweight. Abolished in1.9.70

Establishment of approved 1.5 2.0 Up to 50% cost of buildingscattle units and equipment,30O pur -

chased stockPie Droduction units - 1.0 50% buildings & eauipmentLamb fattening units - 0.2 It 1 i t

Maintenance of heifers to - 6.0 2000 Drs. per calffirst calf

Tm-nort of bred heifers - 2.0 IDX of nirrchase nricePasture improvement 1.9 3.0 50-90% of improvement costsBIknPLongmn and srcultun AQ - A0-80 irS ner hiv * 3 Trs/

Str. of established mulberf438.7 +.reefi

1/ Includes also provision for subsidy of 0.8 Drs/kg on cottonpicked by machine.

Table 7.9 (contd.)

(d) MISCELLANEOUS SUBSIDIES AND PAYMENTS

Budget ProvisionsMill. Drs.

Subsidy to producers of 69.0 100.0 1..15-2.55.Drskgtomato paste Abolished in 1971

Low Interest Loans - 68.5 Subsidy on 2% loans

Compensation for Animals

Slaughtered for Disease 17.0 15.2 80-100C value of animal

Puxechase, Pouiltrv nnd -7.3 To) co,ve-r possqibledeP ciEgg Surplus

Advertising to Increase - 1.3 100% expensesconsumption of pig andpoultry meats

86.5 193.8

(e) TOTAL SUPPORT TO AGRICULTURE

(MiLon Drs.)

1969 1970

Price and Income Supports 1.6hl.7 1 An n

Subsidies on means of production 438.7 438.8

M s e vu oo* .> l93.8

2,166.9 2,337.6

Source: Ministry of Agriculture

Table 8-1: INDEX OF INDUSTRIAL PRODUCTION

(1959 = 100)

Jan-NovWeights 1965 1966 1967 1968 1969 1970

Food manufacture 16.3 123.4 133.6 136.6 150.4 154.1 159.6

Beverages 3.6 162,1 196.4 214.3 212.8 201.3 235.5

Tobacco 11.9 141.6 165.0 142.3 141.1 134.7 l47.8

Textiles 18.3 162.4 177.3 173.1 180.0 200.5 225.6

Clothing and footwear 3.0 122.9 114.6 115.3 117.6 Jl41.6 240.9

Wood and coric 1.6 155.4 159.2 156.6 162.0 172.1 200.7

Fuirniture and fixtuires 1.6 98.3 92.1 81.2 736 72.9 n.

Paper 2.5 163.1 196.5 205.3 217.9 252.4 273.2

Printing and publishing 4.0 104.7 127.8 14.6 113.0 117.7 113.1

Leather and fur 1.4 112.1 125.1 1122.1 106.3 109.7 113.1

Rubber and plastics 1.9 .307.9 401.2 437.0 489.8 632.2 757.7

Chendcals 6.1 220.4 267.9 311.9 355.6 406.6 444.8

Petroleum and coal 4.5 121.1 175.0 222.5 261.1 275.2 n.a.

Non-metallic minerals 7.6 170.9 188.h 201.4 205.6 244.8 272.4

Basi . eal 2 _ ý .6 32.7 C18. A 76.2 719. 90.9 o 1?34

Metal products 4.8 211.5 227.3 219.0 2L5.3 270.3 295.1

Machinery 1.8 86.2 84.6 80.6 75.3 75.0 74.8

Electrical equipment 2.2 208.1 202.3 238.5 221.1 258.3 306.6

Transport equipment 3.7 198.6 204.0 197.8 201.6 217.8 264.1

MLscellaneous 0.6 325.2 387.5 346.5 436.2 296.7 n.a,

Total 100,0 163.2 187.1 112.0 205.9 229.2 262.6

/a 1959

Source: National Statistical Service of Greece.

Tabl' 2 * RS VAT.TT (1L OUTUTT' TN MANTTACTTTTNG(In million drachma)

Tn Chrrant At Constant

Prices 1258 Prices

1. Food, drink and tobacco 16909 2744i 32036 15995 22121 245562. Textiles 7958 11947 15802 7913 11141 135463. uoting and footwear 513 600 82 4699 59 674. Wood procdicts and furniture 2418 3452 3940 2456 3153 33215. Papar, printing & publishlng 02 16937 3ni 48 1818 3281 14676. Chemicals 5072 6837 14143 5148 7531 154157. Stone, clay and glass 2018 4076 6671 2110 3887 55798. Basic metal industries 1012 2428 6413 1094 2731 73089. Mtal mTnufacture, anvinerin 4

and electric goods 1913 7683 10619 1972 7616 9h8610. Transpart equipment 994 2057 3165 940 1784 243711. Other 1184 1667 1872 1094 1517 1507

TOTAL 49488 77789 107840 48239 70754 94174

Source: NSSG, National Accounts Division

Table 8.3: VALUE ADDED IN MANUFACTURING(In million drachmae)

In Current At ConstantPrices 1958 Prices

1960 1965. 1969 1960 1965 1969

1. Food, drin.kand tobacco 3791 5769 6718 3b.92 5089 5525

2. Textiles 2577 377hL SOOh 2576 3593 4397

3. Cloth inL andfootwear 2233 2937 3678 2077 2651 3016

4. Wood prodwetswnd -Hirnit.nre 97 1304 1 173 929 1189 1313

r- P-nr' n-fit-jne

and publishing 724 1282 1551 652 1132 1424

6. Chemicals 1376 2213 682 1593 2415 4921

7. Stone, clay ad 916 1819 2977 995 1835 2649

industries 276 642 1700 324 806 2162

9. Metal manufacture,

electric goods 1923 2972 4090 1988 301 3737

10. Transpcrt eqipment 490 1055 1633 1420 766 1069

11. Other 60 637 723 .385 562 559

T 0 T A L 15683 2403 34129 15431 23052 30772

Source: N.S.S.G., National Accounts Division.

Tal 0 1. TAnD DDANTT(TTTTrV TIT rDL'V MATTTTAr.PTTRV TATTTrMV

(IN TERMS OF VALUE ADDED PER PERSON EMPLOYED)nhDACrMAV AMT 0nWtMAW~rM MDTrT!C

% Increase1958-1963 1903-1969

Annual Annual1268 1263 1969 Overall Average Overall Averaze

Food, drink, tobacco 40,485 43,277 52,304 6.9 1.4 20.8 3.2

Textiles 36,887 44,799 80,000 21.14 4.0 78.5 10.1

Clothing and footwear 28,196 31,181 48,430 10.6 2.0 55.6 7.6

Wood products & furniture 22,647 27,700 23,123 22.3 4.1 -16.5 -2.6

Paper, printing & publishing 40,074 51,699 65,002 29.0 5.2 25.8 3.9

Chemicals 33,384 100,970 163,957 202.5 25.0 62.5 8.4

Stone, clay, glass 35,608 42,935 85,842 20.6 3.8 100.0 12.3

Basic metals 82,820 235,680 378,634 184.6 23.0 61.0 8.3

Metal manufacture, engineeringand electrical 27,825 34,718 47,446 24.8 4.5 35.8 5.2

Transport equipment 20,955 26,489 30,493 26.4 4.8 15.1 2.L-

Other 26,498 7 32 60,146 27.3 5.0 100.0 12.3

All industry 32,220 41,581 61,351 29.1 5 48.0 6.8

Source: Annual Industrial Surveys

TrWie O.5 DAruna Ur raivurukRuIulvu auOtILLI

1A0 1965 lIAA1969

Value Total Value Total Value Total Value Total

Food, drink, tobacco /a 114 14.7 434 24.2 569 12.7 908 12.8

Textiles A 83 10.7 264 14.7 465 10.4 701 9.9

Clothing and footwear 13 1.7 35 1.9 217 4.8 380 5.3

Wood products and fur-

niue11 1.14 9 0.5 30 0.7 31 0.14

A C&ILG j PA ULL6i CL"L

publishing 22 2.8 65 3.6 73 1.6 108 1.5

Chemicals 254 32.8 216 12.0 976 21.8 871 12.3

Stone, clay, glass 33 4.2 61 3.4 116 2.6 202 2.8

Basic metals 31 4.0 133 7.4 1,378 30.5 2,907 40.8

Metal manufacture,engineering and 53 6.8 209 11.6 167 3.7 267 3.8electrical goods

Transport equipment 64 8.2 87 4.8 32 0.7 48 0.7

0 ner 99. 12 - "Ir 4U 150 9, 46., 105 9 r r - / .7

'777 InnC nl I Annw In C) 1. L.oo Irv") n. 7, 1 1 1 Vri. nA % I J.J5J. S. 4. .JL '. LJ.5. V 5 4 4P £47 A LW45. . f I, ~-j *

Note: a/ In each year exports of preserved olives, olive oil, wine in barrelsand tobacco in leaves are excluded.

b in eacn year exports of gnned cotton are excluded.

Source: N.S.S.G. Division of Commerce and Communication

Table 8.6 EXPORTS AS A PERCENTAGE OF PRODUCTION

1960 1965 1968 1969

Food, drinks, tobacco 0.7 1.6 2.0 2.8

Textiles 1.0 2.2 3.7 4.4

Clothing and footwear 0.3 0.5 3.9 4.6

Wood products, furniture 0.5 0.3 0.6 0.8

Paper, printing, publishing 1.2 1.9 1.6 2.2

Chemicals 5.0 3.2 8.5 6.2

Stone, clay, glass 1.6 1.5 2.2 3.0

Basic metals 3.1 5.5 35.5 45.3

Metal manufacture, engineer-ing and electrical goods 1.1 2.7 1.4 2.5

Transport equipment 6.4 4.2 1.3 1.5

Other 8.4 17.1 18.8 36.9

Totnl ! All Tndclutrv 16 2.3 LA AA

Source: N.S.S.G. calculations based on data in Table 8.2 and 8 .5(in current nries)Note: Exports of preserved olives, olive oil and wine in barre ls. tobaccoin Leaves and ginnned cotton are -excluded.

Table 8.7% IMPORTS, -EPORTS AND NET DEFICITS OF INDTETRIAL PRODUCTS

(rdllion US Do"llar)

Iports Exports Surplus (Deficit)

1960 1967 1968 1969 1960 1967 1968 1969 1960 1967 1968 1969

Foodsturfs 2'0.2 28.4 25.4 28.5 11.3 42.7 46.8 38.1 (8.9) 14.3 21.4 9.6Beverages 0.3 1.3 1.5 1.5 2.h 7.3 8.9 11.9 2.1 6.0 7.h 10.4Tobacco 0.1 0.1 0.1 0.2- 0.1 0.3 0.1 0.1 - 0.2 - (0.1)Textiles 29.3 51.9 49.3 53.4 2.7 15.6 15.4 23.1 (26.6) (36.3) (33.9) (30.3)Clothing, Footwear 1.2 2.9 3.3 3.9 0.4 5.8 7.3 12.7 (0.8) 2.9 4.,0 8.8Wood and cork 4.4 5.h 5.5 4.h 0.3 0.3 0.h 0.5 (4.,) (5.1) (5.1) (3.9)Furniture 0.2 1.3 2.0 1.6 0.1 0.5 0.5 0.4 (0.1) (0.8) (1.5) (1.2)Paper 16.0 36.h 38.1 40.5 0.1 1.5 1.5 2.5 (1f.9) (34.9) (36.6) (38.0)Printing and publish-

ing 0.9 2.11' 2.5 2.5 0.6 0.9 0.9 :1.2 (0.3) (1.5) (1.6) (1.3)Leather 2.6 3.3 6.6 1h.5 2.5 7.9 11.9 17.2 (0.1) 4.6 5.3 2.7Rubber 9.6 17.1 17.1 16.6 0.1 1.2 1.o :L.8 (9.5) (15.9) (16.1) (14.8)Chemicals 58.2 132.0 138.0 157.2 8.2 15.8 31.6 3:1.3 (50.0) (117.1) (106.4) (125.-9)Petroleum and coal 16.2 29.5 29.5 33.3 0.1 4.8 6.0 5.5 (16.1) (2.7) (23.5) (27.8)Non metallic minerals 7.0 15.0 14.7 16.6 1.1 3.9 3.9 6.8 (5.9) (u.1) (10.8) (9.8)Base metals 40.0. 74.0 75.6 96.2 0.9 37.7 41.0 89.1 (39.1) (36.3) (34.6) (7-.1)Metal products 22.3 31.9 35.8 38.7 0.5 2.3 2.3 3.4 (21.B) (29.6) (33.5) (35.3)Machinery 59.8 180.0 205.4 238.7 1.h 1.8 0.7 :1.9 (58.h) (178.2) (204.,7) (236.8)Electrical equip-

ment 31.5 91.5 96.0 99.2 0.1 2.8 2.5 4.5 (31.4) (88.7) (93.5) (94.7)Transport equipnent 224.0 149.8 295.0 3hh .h 0.4 1.8 L.3 1.8 (223.6) (148.0) (293.7) (342.6)Other products 11.7 27.h 29.0 30.3 0.9 1.9 2.4 3.5 (10.8) (25.5) (26.6) (26.8)

Total 555.7 882.5 1.070.4 1.222.2 34.2 156.8 186.4 257.3 (521.5) (725.7) (884.0) (964.9)

Source: Hellenic Industrial Development Bank (H.I.D.B.)

Table 8.8 PRODUCTION AND APPARENT CONSUMPTION OF INDUSTRIAL PRODUCTS

Million Dracnae

1960 1969Produc- + - Con- . Produc- + - - Con-tion Imports Exports sumption tion Imports Exports sumn.tion

Food, drink, tobac- *co 16.go +618 -hih =17. 111A ip.06 +906 -1.qO1 .'l149

Textiles 7,958 +879 - 81 = 8,756 15.802 +1,602 - 693 =16,7i1Clothing and

footwear 5,153 + 36 - 12 = 5,177 8,321 + 117 - 381 - 8,057Wood and furniture 2,418 +138 - 12 - 2,544 3,940 + 180 - 27 - 4,093Paper, printing,

publishing 1,827 +507 - 21 - 2,313 4,858 +1,290 - 111 6,037Chenicals 5,072 +2,>2 -252 u 7s36 s,143 +6,213 -_,o 0,1yoNon metallic miner-

C- C.*W. - LJ. J 7 j pj J . 47 v LS.4 Ws W-

Basic metals 1,012 +1,200 - 27 - 2,185 6,413 +2,886 -2,673 6,626Metal nrodunts. anpi-

neering andelectrical goods 4,943 +3,408 - 60 - 8,291 10,619 +11,298 - 294 -21.623

Transport equipnent 994 +6,720 - 12 - 7,702 3,165 +10,332 - 514 13,443Others 1,18tt + h29 -102 - 1,511 1,872 4 1,h4 - 621 - 2,52Total 49,486 +16,671 -1,026 =65,133 107,840 +36,666 -7,719 =136,787

Source: N.S.S.G. and H.I.D.B.

Taule 8.9 alihets bQ Si

1963 1965 1968 -1969

No. of % all No. of % all No. of % all No. of % alluinit u.q lnit.q uinit.q uniýts units units units units

Units emDlo-inunder 10 people 116,398 95.2 113,110 94.9 112,976 94.6 118,437 94.9

10 - 19.99 people 3,354 2.7 3,505 2.9 3,853 3.2 3,438 2.8

20 people and over 2,580 2.1 2,491 2.2 2,564 2.2 2,776 2.3

Total 122,332 inn-n 1io9k, in0.n li9,3Q3 inn.n 124,651 inn.n

B.

Employment by Establishment Size

1963 1965 1968 1969

Empoyr- nEmploy- Employ- Employ- Y

..ees t eef3 Total ee Total ees Total

Units employing

) 287,564 60910 - 19.99 people) 49, 731 10.0 52,351 10. 45,213 9.0

20 peonle and over 18h000 39. 1 186,h30 37.6 176,336 36.2 207.713 11.3

Total 471,564 100.0 495,853 100.0 485,514 100.0 501.566 100.0

a/ Emplomnent Includes salaried emplovees, wage earners,. working proprietors andnon paid family members.

Source: Annual Industrial S&rveys, National Statistical Service of Greece.

Table 8.10: PRIVATE INVESTMENT IN MANUFACTURING INDUSTRY

(in million d alars)

rNNvUM I2rown Druagu I.npLIus

Year Capital Investment Foreign Capital as Percentagein Maning ana imported unaer of Total -rivate

Manufacturing Law 2687/53 Investment

Value Value Percent

1960 59.8 11.7 19.6

1961 62.0 13.5 218

1962 86.6 16.8 19.h

1963 1L.3 h0.0 8

1964 156.o 59.7 38.3

1965 203.7 111.6 Lh.8

a1966 20h.8 1q7-6 76-9

1967 197.7 2-1 16A

1968 La. oc-i

/a1969 267.6 ?? --9 19

/b /a1070 ,1 A

A,

$31.2 million in 1969 and $16.5 million in 1970.

Source: Ministry of Coordination and National Accounts Division, N.S.S.G.

Table 8.11 TOURISM: HeTEL FACrLITIES

CIASSIFICATIDN

Years Luxus (AA) Class A Class B Class CHotels Beds Hotels Beds Hotels Beds Hotels Beds Hotels Beds

(1000) (looo) (1o00) (IDO0) (1000)195 7 2 7 5.3 o 5. 21 .1 20.31960 10 1.9 100 7.6 170 8.9 290 10.5 570 28.91965 20 5.1 105 9.8 217 1 4.3 h06 18.9 748 48.1

1966 20 5.2 134 n.3 235 16.2 h8 21.9 817 54.5

1967 21 5.5 11 11.5 255 18.2 478 24.1 865 59.3

1968 22 5.8 13 13.4 269 19.6 551 28.4 955 67.1

1969 22 5.8 108 13.9 294 22.1 618 34.4 loh 76.o

1970 24 5.9 11i 15.2 323 27.0 67 38.2 1o0 90.0

197:1 . 16.

Source: Ministry of Coordination

Table 8.12 ARRIVAL OF TOURISTS FROM ABROAD

(in thousands)

Year Total Of which: Greek tourist Foreign Arrivals of Foreign nationalsNumber of' Excursionists from abroad tourist by area of originArrivals

From North America From Europe Rest oTotal USA Total EEC the Wo

1955 208. 12.5 24.4 171.5 35.6 34.2 110.5 47.1 2!.

1960 399. 55.5 28.1. 315.8 79.2 75.3 196.9 96.9 39.

1965 976.1 129.2 30.7 816.3 184. 9 172.5 5h6.6 258.2 84.

1966 1131.7 134.1 30.7 966.9 211.0 195.3 6597 297.8 96.

1967 9965 1-47.5 27.9 821.1 193.8 178 .2 539.3 257.,9 88.

1968 1017.6 138.1 92.7 786,8 218.0 201.9 h67.6 29..1 101.

1969 1306.0 166,6 91.6 1047.8 3:27.2 311.8 623.6 334.9 97.

1970 16000 200.0 153.0 1247.0 . . . . .

Source: National Statistical Service

Table 8.13: RAIL, ROAD AND AIR TRANSPORT

RAIIMAYS ROAD INTERURBAN BUS AIRYEmR PASSENqGERS GOODS MOTOR CARS MOTORCYCLES TRANSPORT PASSENGERS / FREIGHT /a(1000) TRANSPORTED in circulation PASSEIIGERS (1000) (1000 tons)(1000 tons) (1000) (10) (1000)

1960 11439 216h.5 95.8 A 33.3 A 70.215 1071.6 10.9O

1965 11537 3289.5 177.7 49.4 110.722 2229.6 21.4

1966 11732 3331.2 203.8 53.9 119.996 2616.7 24.6

1967 1169 300.4 233.7 58.2 127.653 2884.5 24.9

1968 127:26 2499.3 267.7 6:2.7 269.370 3078.0 26.3

1969 13281 3245.0 302.0 66.1 150.852 3846.5 31.5

/ Arrival and departure of traffic, but excluding transit traffic,

/b 1961

Source: ministry of Transportation

Table 8.14,: ELECTRIC ENERGY STATISTICS

(in million KWh)

INSTALLED POWER NET PRODUCTION COSUPXION of which actual salesYEAR C.APACITY OF ELECTRICITY 0:F ELECTRICITY of PPC

(Un EW) DOMESTIC COMMERCIAL ALUIERIMTOTAL P.P.C. TOTAL P.P.C. T'AL P.P.C. INDUSTRIAL

1961 663 627 ?543 2453 2155 2103

1965 1122 1066 h399 4132 38.1 3845 1096 2651

1966 1468 1384 5736 5,48 51o6 4987 1259 3162 567

1967 1586 1503 6656 6301 6135 5979 2415 3499 1064

1968 1870 1787 7339 6949 6657 6479 1519 3842 1128

1969 2374 2291 8422 8010 7650 7434 1773 4469 1192

1970 2592 2509 8991 8>412

Source: Public Power Corporation

Table 8.15: NUMBER CF SCHDOLS, TEACHERS AND PUPILS

1961/62 1965/66 1966/67 1967/68 1968/69 167a

Primary Education

Schools 10,860 10,822 10,757 10,709

Teachers C4,uu c ru &7,7 ) ru,.

aj -s (1000) of wich 927.9 97q.9 979.h 971.9in public schools . 911.8 913.2 907.3 893.4 906.7

Secondary Education

High schools .853 908

Teacher.- 815 if25 -2J 1,49

Phpils(1000) of which 291.5 374.6 388.3 405.9in public schools . 327.0 341.6 357.8 370.9 374.3

Technical/vocational training

Teachers 4.333 4.918 .

Students (1000) 56.3 81.2 90.2 95.0

Higher Education

Schools 10 10 10 10

Professors 998 1,192 2,541 2,327

Students (1000) 30.6 58.0 64.6 73.4 76.4 82.4

Source: N.S.S.G., Ministry of Educ ation

Table 8.16: NUMBER OF HOSPITALS, BEDS, DOCTORS ANJD NURSING PERSONNEL

by region in 1967

of whichHospital with over Beds Doctors Inhabitants Nursing

100 beds 1000 per doctor Personnel

Total Greece 973 95 52.2 5620 67> o704

Centrn1 Greece and Enon 10? 3 2.1 90 1hO1 123

Peloponnese 143 4 3.0 298 1212 655

Ionian Islands 19 2 1.2 57 21466 188

Epirus 3h 1 0.8 75 1369 167

Thessaly 93 1 2.0 196 1472 433

Macedonia 176 19 9.0 781 881 1694

Thrace 37 1 0.7 67 2110 141

Aegean Islands $2 6 3.9 1)3 YY 063

Source: Center of Planning and Economic Research.

Table 9.1: MINIMUM RATES OF WAGES AND SALARIES

(in Dracbmas)

Dates of implementation June Jan. Jan. Feb. Jul. Oct. Mayof new collective areement, .194- -If,) - n7f4 -17041 'Q71 -17 n4p7 -n4 A*J.~ ~W ~ ,.L U ~ .J.7'J L,J7-~4 .L7ww'. _L7w~ I .I.7w. I .I-7%j%1 .J.7-,7

Daily Wages

Men 57 64 75 85 90 96 10.4Women 44 50 60 70 75 80 86 ...

a/Daily Wages for Apprentices-

Manufacturing industries 24 27 35 40 43 46 149 ...Other industries 22 2 35 40 43 4o 6> ...

Month'y QaIesb

Man 10 -6o i-qn I 00 nn 1_900 P _cT , 9 itn)n . 90 e-I--- -I - I - -I,- -(c -1---/d - -- /eWomen 1,150 1,300 1,600 1,600 1,600 2,00OL-- 2,100-- 2,000-

a! Employees up to the age of 19 and engaged for the first time.b/ Salary for persons aged 25, with experience of two years (through July 1967) or one

year (since September 1967)c/ Effective frm September 13, 1967a/ Effective from April 19, 196997 OA .L'y U.L YO.Lflum .0* C o . A U± VC AL. rJalUl A, - IV . Z Lt fae JF 'U:lt Vtl l- UtL

service after the age of 21 a ten percent salary rise is given to a maximum of 30 per-iient in n4rkm wtraa

Sources: Bank of Greece. Monthly Economic and Statistical Raview.OECD, Economic Survey, Greece, 1967 and Government Gazettes.

Table 9.2: WAGES IN MANUFACTURING

(Average hourly earnings in Drachmas)

1960 1965 1966 1967 1968 1969

Food 7.1 9.9 11.2 12.8 13.6 14.7

Beverages 7.2 10.1 12.0 13.1 13.7 14.6

Tobacco 6.2 9.3 11.4 11.7 13.0 13.7

Textiles 5.9 8.8 10.6 12.1 12.9 14.4

Clothing 5.3 9.1 10.4 12.1 12.7 14.5

Wood 5.h 8.9 10.5 11.9 13.3 16*1

Furniture 5.8 10.2 11.8 12.2 13.8 15.5

Paner nroducts 6.6 9.1 10.5 11.6 13.5 14.8

Printin- 10.4 15.4 16.7 16.4 18.6 19.2

Leather 6.6 1o.4 11.8 14.3 15.1 15.9

Rhbber 7.8 9.5 11.4 13.1 14.4 15.7

ChAmniAs 7.6 11.1 12.3 13.5 14.4 15.2

Pp+rnIism andnei 118 15.0 15.9 17.5 17.3 18.4

Non a 114. vnier1 7.8 12.1 1Lh.0 15.0 15.7 17.3

BaSl =+al 10.A 17.5 20.2 19.3 21.2 24.0

Ae po 6.9 XA ihn J, .8 13.5 lh.3 15.h

ac ie 5.7 1nA 1J ,__ 1h.2 15.2

M 17 0 -1 11 a 11 0h ~ _

Me celaneous U.a . .

All industries 7.6L 10.1/b 11.4 12.7 13.7 15.1

- males 0.0 18., -Lh - L. * 16*9

- females 5.7'- 7.3- 8.3 9.7 10.6 11.7

a/ 1961E/ Sampling design revised

Source: ILO: Yearbook of labor Statistics, 1970

/aTable 9.3: 'kDLESALE PRICE IEX -

1963 1964 1965 1966 1967 1968 1969 1970

1.,General Index 104.6 107.8 109.7 113.2 113.9 113.9 118.3 122.9

Final products ofdanestic production forhone consumption 104.8 107.6 110.4 114.5 115.9 116.2 120.6 124.4

a. Primary products 110.0 114.6 118.7 125.0 126.9 128.0 134.5 138.7

b. Industrial products 101.3 102.8 104.7 107.5 108.4 108.3 111.3 114.7

2.Exported productsof domestic Drimarv andindustrial production 101.1 106.6 109.9 113.3 111.1 111.0 116.0 119.4

3.Final products offorein orizin l.6 109.0 106.8 106.8 105.8 1011.7 108.9 118.1

a/ Yearly average

Source: N.S.S.G., Division of Prices and Price Indices

/aTable 9.4: OONSUMER PRICE INDEX

(June 1959 = 100)

1960 1961 1962 1963 1964 1965 1066 1967 1968 19A9 1970

General 102.3 104.1 103.8 106.9 107.8 1.0 1l6.6 u8.6 119.0 121.9 125.8

Foodstuffs 102.1 104.8 103.1 109.3 110.2 115.3 122.0 122.8 122.8 126.9 131.2

Clothing andFbotwear 100.2 99.4 98.5 99.3 100.3 101.6 106.2 109.9 110.0 110.7 112.8

Housing 103.6 105.1 107.1 109.5 ni.4 112.6 115.9 118.3 122.2 124.3 125.6

HouseholdEq1-en 99.90 1 , o. 100 99.ng0001 9. o i 1n. 1i i. 10. 8 108 .0

Medical andPersonal care 101.2 103.4 108.1 109.0 110.8 115.2 120.8 123.2 125.6 129.2 132.4

Education andRecreation 100.7 103.0 102.4 98.7 96.4 92.5 98.4 100.2 99.6 100.5 109.5

Transport and -

CTm nication 112.8 112.8 113.7 114.0 115.2 117.4 124.0 126.0 24.8 133.6 1'40.1

Miscellda-neouCMs 101.U6 'LV.6 Ud .100.L3 0. 00.5 103.U O. 1 1U9. 4 109 .7 .n -N6

a/ Yearly averages

Source: National Statistical Service, Division of Prices and Price Indices

小