Economic Background – Greece

Greece has a mixed capitalistic preservation with a large public sector that accounts active half of gross domestic product. Besides, Greece is a major donee of European coupling aid, which equal to active 3. 3% of annual GDP. In addition, Greece is an agrarian country and one of the poorest countries of the European Union with the second to lowest average income, after(prenominal) Portugal. In January 2002, Greece adopted the euro as its currency.The acceptance provided Greece, formerly a high ostentation risk country under drachma, with ingress to competitive loan rates and as well to low rates of the Eurobond market which take to a dramatic increase in consumer spending and gave a momentous rising slope to economic growth. Between 2003 and 2007, Greece economy grew by nearly 4. 0% per year. The preparation for the capital of Greece Olympic Games during 2004 gave an impulse to the Greece economy. However, the financial crisis had slowed pass the Greeces economic growth to 2.0 % in 2008.As a result of the humans financial crisis and its impact on door to credit, world trade and domestic consumption, the economy went into recession in 2009 and contracted by 2. 0%. In late 2009, corroding public finances, misreported statistics, and inadequate follow-through on restores prompted major credit rating agencies to grade Greeces international debt rating, which has led to increase financial instability and a debt crisis. classic government has approved a three-year reform program that includes cutting government spending, trim down the size of public sector, tackling tax evasion, reforming the health care and pension systems, and improving fighting through structural reforms to the labour and ware market under the intense gouge by the EU and international lenders.The Greek Government projects that its reform program ordain achieve a reduction of Greeces famine by 4% of GDP in 2010 and allow Greece to decrease the deficit to below 3% by 2012. G reece call for activation of a joint European Union-International Monetary Fund support implement designed to assist Greece in backing its public debt in April 2010.