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The first time Greece defaulted was more than 2,000 years ago

Here’s 11 things you might not have known about their economy.

Plato and Aristotle
Plato and Aristotle
Image: Wikimedia

EVERYONE IS WAITING for Greece and Europe’s leaders to agree on a bailout deal.

It seems as if every morning brings another incremental development or regression in Greece’s battle against its European creditors.

So in the meantime, here’s a guide to what’s been happening in the underbelly of Greece’s economy, including everything from demographics to corruption to olives.

Greece has a history of financial troubles — the country’s first default occurred way back in the fourth century B.C.

greece-has-a-history-of-financial-troubles--the-countrys-first-default-occurred-way-back-in-the-fourth-century-bc Plato and Aristotle Source: Wikimedia

Back in the fourth century BC, 13 Greek city-states borrowed from the Temple of Delos. Most of the borrowers, however, “never made good on the loans and the temple took an 80% loss on its principal”.

As a reference point, Plato, Aristotle, and Alexander the Great were alive during the fourth century.

In the modern era, Greece has defaulted a grand total of five times — which is only half as many times as the default leaders, Venezuela and Ecuador, have.

Greece Athens Acropolis Parthenon Temple Source: AP Photo

Greece defaulted on its external-sovereign-debt obligations five times:

  • 1826 — During the Greek War of Independence from the Ottoman Empire.
  • 1843 — Greece used funds from the Loan of 1832 on its military and “the upkeep of Otto, a Bavarian prince”. The country stopped making payments in 1843.
  • 1860 — After this default, Greece was kicked out of international markets for 18 years.
  • 1894 — When the markets opened, lenders were overeager, borrowing increased to unsustainable levels, and the government suspended payments in 1893.
  • 1932 — During the Great Depression.

Greece has spent a combined 90 years — almost half of the time since its independence — in financial crisis.

greece-has-spent-a-combined-90-years--almost-half-of-the-time-since-its-independence--in-financial-crisis The sortie of Messologhi. Source: Wikimedia Commons

Greece finally gained independence from the Ottoman Empire in 1830 after Great Britain, France, and Russia intervened to help out in the War of Greek Independence. (Fun fact: even poet Lord Byron joined in to support Greece.)

The country has spent 90 out of 196 years since then in financial crisis.

Corruption costs Greece about 8% to 10% of GDP per year.

A Brookings Institute study by Daniel Kaufmann estimated that corruption cost Greece about 8% of gross domestic product per year (some have estimated it as high as 10%). Notably, a large bulk of it involves ordinary citizens doing day-to-day activities.

“If Greece had better control of corruption — not to Swedish standards, but even at Spain’s level — it would have had a smaller budget deficit by 4% of gross domestic product” on average over the past five years, Kaufmann wrote back in 2010.

A 2014 study by the European Commission said Greece was the most corrupt country in the European Union — on par with China.

Self-employed Greeks are “paying over 100% of their reported income flows to debt servicing on consumer debts”.

Greece Financial Crisis A street vendor in Central Athens. Source: Dimitri Messinis/AP/Press Association Images

Upper-middle-class professionals in Greece dodge taxes.

A blurb from a University of Chicago paper from 2012 says “the self-employed are paying over 100% of their reported income flows to debt servicing on consumer loans”. Analysts have suggested that this means they are underreporting their incomes.

In 2009, €28 billion of tax was evaded by self-employed people alone.

49.7% of Greece’s young active population is unemployed.

Last year, youth unemployment was recorded at 56.4%.

Overall, Greece’s unemployment rate remained steady at 25.6% for March 2015. It hit an all-time high of 28% back in September 2013.

63.5% of Greeks between ages 18 and 34 live at home with their parents.

And over half of those between the ages of 25 and 34 live at home. These numbers have gone up since 2010.

“Moving out of the house you grew up in is a rite of passage,” Bloomberg reporters Flavia Krause-Jackson and Giovanni Salzano write. “Moving back in with your parents is a cry for help. In Greece, it’s come to just that.”

Only 23.9% of Greece’s population is under the age of 24. By comparison, 47% of Saudi Arabia’s population falls in that age bracket.

Greece Financial Crisis Greek students protest outside the finance ministry. Source: Associated Press

Greece has an aging population: Only 9.8% of Greeks are ages 15 to 24, while 32.9% are over the age of 55. The birth rate has fallen to 1.3 babies per woman.

This is a twofold problem as rising pension costs will have to be paid for by a labor force that’s shrinking.

Greece is almost five times as big as Massachusetts, but Massachusetts’ GDP is twice that of Greece.

Greece’s gross domestic product is $242.2 billion, while Massachusetts’ is $420.75 billion.

Massachusetts is 10,554 mi2 (27,336 km2), while Greece is 50,949 mi2 (131,957 km2).

Greece’s economic nightmare today is worse than this point in the US’ Great Depression.

This chart from RBS Economics shows the trajectory of gross domestic product indexed to just before things got bad in the US during the 1920s and in Greece just a few years ago.

greeces-economic-nightmare-today-is-worse-than-this-point-in-the-us-great-depression

Greece’s annual production of olive oil weighs as much as 1,575 blue whales.

Greece, the third-largest olive-oil player in the world after Spain and Italy, produces 300,000 tonnes a year. Ninety percent of that is exported to the European Union.

Fun fact: Some of the olive trees planted in Greece during the 13th century are still producing olives.

An adult blue whale weighs 420,000 pounds.

Greece Olive Oil Source: Associated Press

- Elena Holondy

Read: ‘Greece is in the middle of a really shite problem’ >

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