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The determination to be a part of the European Monetary Union is evident from the macroeconomic achievements of the country. Inflation has fallen from a double digit figure 5 years ago, to 4.8% in 1998, and is expected to fall even further reaching 2.2% by the summer of 2000, when the formal application to join EMU is expected to take place.
Real GDP has increased by 3.2 % in 1997 and 3.5% in 1998, well above the respective average growth in the European Union.
The budget deficit in 1998 was 2.2%, achieving the criterion set at the Maastricht Treaty of 3%.
Interest rates are expected to continue the downward slide in order to converge to Eurolands average interest rates. Currently, the 10 year Greek government bond is trading at a yield of 5.90-6.00%, having a spread of 200 basis points from the 10 year German Bund, while at the beginning of 1998 this spread was almost at 600 bp.
On March 16th the Greek currency joined the ERM with a downward adjustment of the Greek drachma in respect to the ECU. This has helped to increase exports of goods and services by 7.8% in comparison with the previous year, and also stabilize the local currency from any future adverse fluctuations.
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ATHENS 2004 Olympic Games
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Greece will be the host of the Olympic games in 2004, and its capital and the Athens metropolitan area will be a place of increased production activity. The Olympic village along with other major athletic infrastructure projects are already under process, while two other major projects, the Athens Metro, and the new International airport at Spata, will be completed well before the games. |
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Industrial production has increased by 6.9% in 1998, a record for the last decade while public investment increased by 13% in the same year. Private investment has also contributed substantially to the economy's growth in 1998 since the funds invested had an increase of 8.4%, in comparison to the previous year. |
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