Contemporary Trade Policy Of Greece Economics Essay

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This essay attempts to demo that the modern-day trade policy of Greece has non been merely imposed by the European Union but that, in fact, it reflects the dependant development that the state has undertaken since 1949. Its development and trade policy have been influenced by both structural facets of the planetary capitalist economic system and the result of category battle at the domestic degree. Since the post-war epoch, Grecian trade policy, consisted of allowing market forces determine the form and composing of imports and exports while no state-led effort to heighten the state ‘s fight and diversify exports was of all time undertaken. This policy resulted in a negative trade public presentation characterised by an heteronomously determined trade form, an import dependance which is non accompanied by an export public presentation based on the state ‘s comparative advantage and an increasing fight spread sing core European states and developing states from East Asia and the Balkans. Overall, the negative trade public presentation of Greece is the consequence of its integrating in the planetary capitalist economic system through its European geographical dimension.


Europium: European Union

European union: European Economic Community

Air combat command: Advance Capitalist Countries

TNCs: Multinational Corporations


In the visible radiation of Greece ‘s current debt crisis an analysis of its trade policy and public presentation can uncover the deeper structural causes that lie behind the monolithic enlargement of its debt. While the analysis of the causes behind the Grecian crisis transcend the purposes of this essay, we will demo that Greece ‘s negative trade public presentation, and the changeless trade balance shortage that accompany it, reflect the post-war acceptance of a dependant development, which can non be excluded from any serious analysis of the modern-day crisis.

One could get down the analysis of Grecian trade policy at the European degree since the harmonization of Grecian duties with the EU ‘s external duties, the ordinance of agricultural production by the Common Agricultural Policy and the representation of European states in the WTO as a individual organic structure connote that any member state ‘s trade policy is shaped at the supranational ( European ) degree. However, an analysis of Grecian trade policy as a top-down procedure imposed by the EU overlooks, foremost, the tendencies and the kineticss of the Grecian economic system prior to accession which lead to the current EU-shaped trade policy and, secondly, it omits the fact that each member state ‘s trade public presentation is affected otherwise by EU policies due to the divergencies in their agricultural and fabrication sectors. The purpose of this essay is to demo that in the post-World War 2 epoch Greece adopted a depended sort of development which was epitomised and deepened by its accession to the EU. The trade policy and public presentation of the state is a mere contemplation of this developmental scheme.

We will, therefore, approach the modern-day trade policy of Greece as a consequence of procedures at, both, the national and supranational degree. At the supranational degree, we will concentrate on the structural facets of the planetary capitalist economic system and the state of affairs of Greece in the European fringe, which prevented it from following an independent capitalist development based on its ain productive sector. At the national degree, we will emphasize how some cardinal political events and the result of category battle affected Grecian trade.

For the analytical intents of this essay we will split the post-war history of Greece in four key periods: the 1949-1967 period which we will name “ The right wing regulation ” , the 1967-1974 period or “ the military/Junta regulation ” , the 1981-1985 period, which non merely coincides with the full rank of Greece in the EEC but besides with the first term of office of the societal democratic party of PASOK, and, hence, this period will be called the “ societal democratic experience ” and eventually the last political stage will be the 1985-present period which will be called the “ Europeanisation stage ” and which signals the institutionalisation of Greece ‘s dependence to the EU through its deeper integrating. We will try to demo how each of these cardinal periods in the political history of post-war Greece influenced and shaped modern-day Grecian Trade policy.

This essay is divided in 3 chief parts which reflect the three major issues of the Grecian trade policy and public presentation: its heteronomously determined nature, the increasing import dependance and its fight spread. In each of these parts we aim at analyzing the historical development of these issues and the influence of the structural and political factors ( of the four periods mentioned above ) upon them. The first portion will analyze how the planetary division of labor and Greece ‘s dependence on foreign capital determined the trade behavior of the state. In the 2nd portion we will demo Greece ‘s failure to establish its trade activities around a possible comparative advantage, which led to the dismantling of its productive sector and the “ servicisation ” of its economic system. The 3rd portion will analyze the inability of Grecian exports to vie with those from core European states every bit good as from Asiatic and Balkan developing states along with the State ‘s inactive credence of this fight spread.

Part 1

The triumph of the Hellenic Army ( the functionary ground forces of the land of Greece ) over the Democratic Army of Greece ( founded by the Greek Communist Party ) in 1949 signalled the terminal of the Greek civil war and secured for at least 15 old ages the licking of the Greek societal and left-of-center motion, which emerged during the Nazi business when the National Liberation Front was created. Most significantly, for the intent of this essay, since the possibility of a socialist or crowned head development was excluded by the licking of the motion, the terminal of the civil war signalled the oncoming of a capitalist development which would, finally, follow a dependent character. Indeed, the Hellenic Army was supported non merely by domestic rightist motions but besides by the UK and the US since the Greek civil war was interpreted as the first struggle of the Cold War. Therefore, the political ( and military ) dependence of Greece, along with the political involuntariness of the Greek elites, excluded the acceptance of an independent economic development and, alternatively, set the footing for a development based on the economic dependence to Western European capitalist economy, which, in bend, shaped consequently Greece ‘s trade construction.

This means that, besides the being of protectionist steps, which were permitted by the institutional model of the immediate post-war international economic system, the procedure of Greece ‘s development was left to market forces. This implies that there was no state-led effort to diversify exports through a planned and complete ( alternatively of sectoral ) industrialization of the state. In other words, the developmental scheme of Greece was determined externally by the constructions of planetary capitalist economy and the planetary division of labor. Indeed, Greece entered the planetary capitalist market without holding foremost developed, internally, a competitory productive base, unlike most developed states which foremost achieved the procedure of industrialization at the domestic degree through direct province intercession.

This statement is best illustrated by Neo-Listian Political Economy and particularly by Chang ‘s historical history of the early developmental procedure of the US and the UK in which he shows that the province, through public investing in substructure and fabrication, subsidies to exports and import responsibilities on foreign manufactured goods, promoted industrialization and intervened straight in order to heighten the fight of the state ‘s exports before its liberalization[ 1 ]. Therefore, the deficiency of active province interventionism and infant industry policies ( i.e. capitalist development at the national degree ) prior to Greece ‘s integrating to the planetary economic system meant, non merely, that the Grecian economic system would develop as a complement of planetary capitalist economy ( instead than an built-in and necessary portion of it ) but besides implied, de facto, a competitory disadvantage compared to core states.

A feature of this dependent form of development is the foreign-led industrialization that took topographic point in the state. The feature of this dependent industrialization, which is undertaken by multinational capital, is that fabrication merchandises are produced for the planetary market instead than for domestic ingestion[ 2 ]and therefore they do non try to decrease the import dependance of the state. Furthermore, Greek capital ne’er undertook a proper procedure of industrialization chiefly because of the little size of the domestic market ( in footings of GDP per Capita ) and the really low degrees of bing engineering ( and therefore productiveness ) . As a effect, as in other peripheral states of the EU ( e.g. Spain, Ireland ) , private investing was greatly absorbed by low-productivity investings such as investing in lodging ( 40 % of entire private investing )[ 3 ].

If we look closely at the dynamic sector of the Grecian economic system in 1992 ( crude oil merchandises, pharmaceuticals, electric-electronic stuffs, gum elastic and plastics ) we can detect that 15.8 % of all industrial houses runing in the sector and with gross revenues over one billion dollars a twelvemonth were controlled by foreign involvements[ 4 ]. More unusually, foreign controlled industries in these sectors ( except for electronics ) recorded net incomes which were significantly higher than the 1s recorded by Grecian houses[ 5 ]. This raises the issue of the repatriation of net incomes and their limited usage to the domestic economic system. The exportation of domestically created excess and its negative consequence on the current history balance of the state is, for Dos Santos, a main feature of dependant development since it implies an deficiency of bid over domestic production[ 6 ].

The most of import stage of Greece ‘s dependent industrialization is the 1965-1973 period which coincides with the Junta regulation and which Fotopoulos calls the “ Industrial Spring ”[ 7 ]. During this period the military absolutism managed to quash the brief radicalisation and mobilization of the societal motion of 1965 ( which emerged during the politically disruptive period of “ Apostasia ” ) and to stamp down unionist activities through violent or legal agencies. Overall, during the Junta regulation the absolutism offered conditions of political and economic stableness which led to an addition in foreign investing from MNCs in the metallurgical, chemical and metal building industries[ 8 ].

These investings, in bend, led to a qualitative alteration in the composing of Grecian exports since the portion of Greek manufactured exports to entire exports went up from 5.6 % in 1964 to 46.4 in 1973[ 9 ]. However, non merely this industrialization procedure was uncomplete in character, due to the fact that merely some specific sectors benefitted from FDI, it besides had a impermanent character since, from the early 1980 ‘s and on, FDI to Greece has contracted significantly taking to the state ‘s deindustrialisation[ 10 ]. The reorganization of TNCs ‘ productive activities in the 1980 ‘s, therefore, contributed to the diminishing part of industry to Greek GDP from 19.3 % in 1971 to 14.8 % in 1991 ( which corresponds to its 1951 part! )[ 11 ]and to the diminution of the state ‘s portion of universe trade in manufactured merchandises which decreased from 0.18 % in 1990 to 0.12 % in 1999[ 12 ].

From a broad point of position, adhering to thoughts of cosmopolitanism, the nationality of the capital invested is unimportant, what is of import is the public presentation of the economic system as a whole[ 13 ]. However, our concern over the dependence of Greece to foreign capital does non raise an issue of national individuality but, instead, reveals deeper structural issues. Indeed, the brief “ industrial spring ” was a consequence of the restructuring of the productive activities of Western European Capital and the beginning of the deindustrialisation of nucleus European states instead than the oncoming of a sustainable industrialization in Greece. The Junta regulation offered the conditions of political and economic stableness that were missing during that clip ( 1968-1973 ) in Western Europe due to the enlargement of wildcat work stoppages and “ hawkish pay bargaining ”[ 14 ].

As Nikolinakos argues, Greece has been bound by the transnationalisation of the productive activities of Western European Capital which ascribed it a peculiar function in the division of labor within Europe[ 15 ].This means that by set abouting foreign-led industrialization, Greece depends on the restructuring of TNC activities which occurs either because of subjective ( e.g. proliferation of category battle ) or nonsubjective ( liberalization of other low-labour cost peripheral states ) grounds. Therefore, foreign-led industrialization does non put the footing for a sustainable industrialization and accordingly can non vouch a competitory export public presentation in the long term.

Part 2

The really limited industrialization of Greece and the policy of allowing market forces and TNCs ‘ activities shape the developmental flight of Greece had the consequence of making a resource instability or what Fotopoulos describes as a “ consumer society without a production base ”[ 16 ]. This means that domestic production failed to fulfill domestic demand adequately and therefore a dependance on imports ( particularly EU 1s ) in order to fulfill domestic demand, necessarily, occurred.

For Liberals and free trade protagonists, the partial satisfaction of domestic demand by foreign goods is non a bad in itself since its negative facets ( i.e. import incursion, balance of trade shortage ) can be offset through a competitory export public presentation which can be achieved when a state shifts its productive activities around the trade goods it produces most expeditiously. Therefore, both classical Ricardian and Neo-Classical trade theory claim that the reallocation of national productive forms so as to heighten the state ‘s comparative advantage will hold, overall, public assistance maximizing effects in all states take parting in free trade. For case, the neo-classical Heckscher-Olin theorem argues that a state opening up to merchandise will exports the trade goods that utilise its most abundant factors of production, which, in fact, represent its comparative advantage. Similarly, that state would import the trade goods that use the most scarce domestic resources. As a consequence, there will be positive effects both on the ingestion and production side since ( comparative to an autarkic state of affairs ) the monetary values of the exported and imported trade goods will increase and diminish consequently.

In the instance of Greece this means that, after the official oncoming of the trade liberalization procedure when Greece signed an Association Agreement with the EEC in 1961, its exports should dwell of labor-intensive and agricultural merchandises. Indeed, on the one manus, Greece had an abundant labor force in a sense that it was inexpensive comparative to core European states ( instead than in absolute Numberss ) due to the labor subject imposed during the right-wing and the Junta regulation. On the other manus, it had the largest agricultural sector by European criterions since still in 1991 it employed 17.3 % of the active population[ 17 ]. The import composing, harmonizing to the theoretical account, should be dominated by capital-intensive goods since Greece was missing the necessary capital to bring forth them.

In pattern, nevertheless, the theory did non use so swimmingly to the instance of Greece. In the long term, the state was capable to import incursion in both capital and labour intensive merchandises while its land copiousness did non take to a strategical export publicity of agricultural merchandises to EU states. Alternatively, during the 1980 ‘s and after the failed effort to industrialize the state during the Junta regulation, Greece expanded its third sector, which has been since so the most of import sector of its economic system. In other words, Greece has failed to concentrate its trade activities around a possible comparative advantage of its productive sector.

Historically, developing states have exploited their comparative advantage by heightening their traditional fabrication sector since it is unskilled labor-intensive and is characterised by low engineering degrees[ 18 ]. Grecian exports of traditional consumer good ( fabrics, vesture, furniture, processed nutrient and drinks ) to the EU did increase by 65.2 % between 1967-1973 as a per centum of entire exports addition[ 19 ]and, therefore, were used as an country of comparative advantage. However, this advantage was merely temporal since after the accession to the EEC in 1981, this sector faced increasing import incursion. Indeed, between 1981-1987 import incursion in traditional/light consumer goods quadrupled[ 20 ]as they were outweighed by similar and inexpensive merchandises from East Asia[ 21 ].

However, besides the structural facet of the new international division of labor which ascribed the production of these trade goods ( particularly vesture and fabrics ) to the states of East Asia, political factors, and, particularly, the public assistance policies of PASOK during the Social Democratic Experience, influenced greatly the destiny of Grecian traditional exports. Indeed, in its first term in office, grants were made to the turning moral force of the labour motion, which expanded after the autumn of the military absolutism, and rewards increased by 7.8 %[ 22 ]. Therefore, the comparative advantage of labour copiousness was lost and resulted in the involuntariness of TNCs to go on investing in Greece ‘s fabrication sector.

Equally far as the agricultural sector is concerned, no scheme to heighten agricultural production for export was undertaken and, alternatively, it was treated as a “ residuary factor ”[ 23 ]. This is non merely because the Common Agricultural Policy of the EU is the cardinal decision-making organ for agricultural production within the EU and forced the forsaking of assorted traditional Grecian agricultural activities, but besides because EU ( and universe ) agricultural merchandises have gained a great incursion within the Grecian market. Indeed, already within one twelvemonth of its accession to the EEC agricultural imports increased by 91 %[ 24 ]As a effect, non merely the agricultural trade balance has remained in shortage since accession to the EU, but this shortage has been turning invariably. For case, from 1994 to 2008 the agricultural trade shortage has increased from 8.6 billion to 43 billion or in other words an addition of 403 % while its trade shortage merely with the EU has increased by 256 % ( from 6.2 billion euros in 1994 to 22.2 in 2008 )[ 25 ]. Therefore, it can be said that in footings of agricultural trade the accession to the EU has increased Greece ‘s nutrient dependence.

Overall, the failure to concentrate in an country of comparative advantage has resulted in an import dependance. This dependance on foreign merchandises can be exemplified through the fact that import incursion ( i.e. the proportion of imports to the GDP ) increased invariably in the post-war period. from 18.5 % in 1950-1959 to 25.9 % in 1970-79[ 26 ]and went up to 35 % in 2002-2008[ 27 ]. In add-on, in 1950-59 Grecian exports covered merely 43 % of imports and 39 % in 1970-1979[ 28 ], while this per centum stood at around 30 % in 2002-2008[ 29 ]. The latter means that the increasing incursion of imports to fulfill domestic demand was non matched by a corresponding addition in the value of Grecian exports[ 30 ]. These Numberss become even more disclosure of the Grecian dependence on foreign imports and the diminishing importance of exports particularly when we compare them to the mean per centum of imports covered by exports in the EEC which stood at around 90 % in 1990[ 31 ]( today these Numberss stand at 86 % for France and 120 % for Germany )[ 32 ]33.

Furthermore, the other facet of the import dependance and the resource instability of Greece lies in the uncomplete character of its foreign-led industrialization since, as mentioned above, Grecian fabrication was concentrated in low-value added merchandises which made it progressively dependent on the import of foreign engineering and capital intensifier merchandises which have higher value added. In add-on, fabrication in Greece was besides concentrated in piecing parts for export and treating natural stuffs which increased the state ‘s dependence on the import of stuffs and inputs for processing and piecing[ 34 ]. For case, in the dynamic section of Grecian fabrication ( electric, chemicals etc. ) the import of natural stuffs and inputs from other ( developing ) states was, significantly, more of import than the usage of domestic inputs or natural stuffs[ 35 ].

The loss of both land and labour copiousness advantages excluded any possible for the sweetening of trade public presentation based on productive capablenesss and lead to the paradox of an agricultural economic system pass throughing to a services economic system without any important industrial passage, as in most nucleus ACCs. Indeed, after the oncoming of trade liberalization in Greece, the state ‘s fabrication sector could non vie with foreign merchandises and, therefore, no effort to reenforce the productive capacities of the state was undertaken. Therefore, PASOK during the societal democratic experience could non set about its pro-employment policies by absorbing the excess labour force ( which was until so absorbed by in-migration ) through an expansion of the productive sector. Alternatively, it created new occupations by spread outing the public service sector, which lead to the creative activity of, what ( neo- ) progressives would characterize as a inefficient/parasitic populace sector. Since so, the service sector of the economic system has had an spread outing inclination and Greek trade has been trusting overly ( by EU criterions ) on the export of services. Indeed, while no other EU member state ‘s export of services account for more than 35 % of their entire exports, Greek commercial services account for more than 50 % of its entire exports[ 36 ].

Part 3

The loss of the land and labour comparative advantages of Greece due to the structural and political factors mentioned above, resulted in a negative trade public presentation which is reflected in its invariably increasing trade shortage and the inability to maintain up the rate of export growing with the rate of import growing. At the bosom of this public presentation lies a fight spread between Greece and the remainder of the universe ( particularly the nucleus EU states and developing states ) .

For Liberals, it is non the witting political determination to go forth the development of the productive capacities of the state to market forces through trade liberalization policies that led to this increasing fight spread but instead they argue that the job lies within the province setup and its irrational policies. In other words, the negative trade public presentation is due to extra-economic factors. For illustration, Pirounakis blames, among others, Grecian bureaucratism, the unmeritocratic Greek educational system which prevents entrepreneurialism, the irresponsible public assistance policies of PASOK during its first term in office and its attendant inability to keep a model for high productiveness degrees ( through labor subject )[ 37 ]. Tsaveas, in a similar vena excludes economic/structural factors as the cause of the widening trade shortage of Greece and argues that, in fact, the state since the 1980 ‘s had failed to to the full liberalize its market, partially because of its geographical place which did non include any common boundary lines with the EEC members[ 38 ].

Alternate attacks might subtract radically different grounds behind the un-competitiveness of Grecian trade. As mentioned earlier, for Neo-Listian theory the latter can be attributed to the absence of a national development – in the signifier of active province intercession and protectionism- prior to liberalization. Similarly, Marxist theory of dependence stresses the inability of developing states to retain control over their productive resources and to set about a development based on technological progresss, alternatively of increasing labour development, because of the monopolistic control of engineering by imperial states[ 39 ]. For these theories it is, therefore, the full integrating of developing states within the international economic system that gives them a trade disadvantage instead than their incomplete/partial integrating, as Tsaveas argues.

All the theories mentioned above, emphasize the important function of the province either in footings of misdirection or in footings of its inability to command the developmental flight of the state. Therefore, it is important to gestate the map undertaken by the Grecian province and its function in advancing ( or non ) a competitory export public presentation. For this we will utilize the “ unfastened Marxist ” definition of provinces as “ political ‘nodes ‘ or ‘moments ‘ in the planetary flow of capital ”[ 40 ]whose purpose is to take barriers to planetary capital accretion[ 41 ]. The Grecian province in the different signifiers it took in its post-war flight has, so, undertaken this function. During the right-wing and Junta regulation, through its policy of dependent industrialization and the labor disciplined it imposed, the province facilitated the reconstituting productive activities of planetary capital. Whereas, during the societal democratic experience and the Europeanisation stage, due to the forsaking of any effort to industrialize the state and diversify exports, the Grecian province accepted its import dependance and contributed to the facilitation of the flow of imported trade goods through investing in substructure ( energy, telecommunications, transit ) and the creative activity of external economic systems of graduated table[ 42 ].

However, the province, being at the same time a signifier of capitalist societal dealingss[ 43 ], in the post-Junta Rule period, it reflected the turning force of the brotherhood and labour motion by, as mentioned above, increasing rewards and employment in the service sector. Therefore, the mainstream broad review, while is partly right in indicating out the increasing labour unit cost, which increased by an impressive 16.6 % in 1982 and, overall, by 3.5 % in 1974-1989, as a cause of uncompetitiveness, it omits the fact that rewards in Greece have been traditionally and significantly lower than in nucleus states[ 44 ]45. This means that the review can be reversed by reasoning that it is the inability of Grecian houses to raise their productiveness degrees to those of core European houses instead than the inordinate pay additions that is at the bosom of Greece ‘s deficiency of fight[ 46 ].

In bend, this translates into a technological development issue which is the consequence of, as mentioned above, the monopolistic ownership of engineering by nucleus states and is reflected by the higher Research & A ; Development investing in nucleus states compared to Greece[ 47 ].The monopoly over engineering consequences, besides, in qualitative divergencies in the export composing of Greek and nucleus European states ‘ exports. For case, the bulk of Grecian fabrication exports ( 69.7 % ) consist of low and medium-low engineering strength merchandises while for Germany these merchandises represent merely 30.2 % of its fabrication exports[ 48 ].

In Marxist footings this can be interpreted as an case of ‘unequal exchange ‘ . The higher organic composing of capital in the nucleus states augments the productiveness degrees of their houses, which means that they can bring forth more trade goods incarnating less living labor and sell them for a higher monetary value than the labor incorporated in them[ 49 ]. On the other manus, the less developed states with a lower organic composing of capital are forced to sell their trade goods harmonizing to the labour value incorporated in them. Therefore, the additions from trade are higher for the state with higher technological/productivity degrees which, for case, resulted in a turning trade shortage between Greece and Germany which doubled between 1998 and 2008 ( from aaˆsA¬2.24 billion to aaˆsA¬5.34 billion )[ 50 ].

Greece ‘s trade public presentation shows its inability to vie, non merely, with core European states, but besides with EU and non-EU developing states particularly after the convergence of Grecian trade policy with the EU ‘s trade policy in 1986 when the state had to harmonize its external duties to 3rd states with those set by the EU. Indeed, while after its Treaty of Association with the EEC in 1961 and the abolishment of responsibilities on imports from Greece by member states in 1968, Greek traditional exports had a comparative advantage sing other developing states who had non signed such understandings, this advantage was lost during the Europeanisation stage to states that concluded discriminatory trade understandings with the EU[ 51 ]. Indeed, states like India and China or Bulgaria ( in the European district ) non merely offer the conditions of political and economic stableness that the Junta regulation provided prior to the political liberalization of Greece, but in add-on they are characterised by even lower labor costs. Even Grecian houses in these sectors ( particularly fabrics ) have been late traveling their activities to EU-Balkan neighbouring states which have lower production costs[ 52 ].

Furthermore, the fight spread between Greece and the World is institutionalised ( or “ locked in ” ) through the harmonization of Greek pecuniary policies with those of the European Central Bank during the Europeanisation stage which deprived Greece from the lone competitory policy that it could utilize, viz. the devaluation of its national currency, the Drachma. Devaluation could allow an unreal sweetening of fight like it did in the mid-1980 ‘s.

Within the structural model of the EU, the Grecian State was unable o change by reversal the place ascribed to it by the international division of labor. The deficiency of interventionist policies to onset industrialization and heighten the quality and measure of exports, forced the state to progressively trust on the export of services to rectify its fight spread. Indeed, non merely has the portion of services in the importance of the economic system been increasing, as shown above, but Greece has been able to keep a excess in its services ‘ trade balance. This excess has been ( partly ) covering over the old ages the negative trade balance in goods, through grosss from transit ( i.e. transportation ) and touristry[ 53 ]5455.

Servicess, have become the lone “ arm ” left to the Grecian economic system to change by reversal its negative trade public presentation in goods. But uncertainties can be raised sing the viability of trusting on services ( particularly transporting and touristry ) since they are capable to fluctuations in demand as the recent international crisis has shown[ 56 ]. Furthermore, empirical findings show that trade public presentation in services has non been strong plenty to get the better of the overall trade shortage ( in both goods and services ) which from 1998 to 2008 has worsened from 7.2 % of GDP to 11.3 %[ 57 ].


This essay attempted to undertake three chief issues that characterise Greece ‘s trade policy and public presentation in relation with the developments in the structural procedures of planetary capitalist economy and the balance of societal forces within Greece. In the first portion, by concentrating on the foreign-led industrialization of the state we analysed the externally determined character of Greece ‘s economic system and trade forms. We stressed that the dependent character of the state ‘s industrialization did non supply the footing for a sustainable export publicity policy because the former was capable to the kineticss of the international division of labor and the restructuring of TNCs ‘ activities. In the 2nd portion we focused on the export and import composing of the state. We argued that Greece, particularly after 1961, was non able to concentrate its trade activities around a sector of its industry or agribusiness that could or should represent its comparative advantage. Therefore, the deeper integrating within the EU forced the dismantling of the state ‘s productive setup and the displacement of its trade activities towards the export of services. In the concluding portion, we critically analysed the turning fight spread that characterise Greek trade. The former was attributed, on the one manus, to the function undertaken by the Greek province which passively accepted the place that the international division of labor ascribed to it. On the other, its fight spread was attributed to the structural inability to vie with either technologically advanced nucleus European states like Germany or low-labour cost developing states of the Balkans or East Asia.

Overall, we argued that the peculiarly negative public presentation of Grecian exports and Greece ‘s increasing import dependance was a consequence of the absence of a national capitalist development which, historically, has been a stipulation for a competitory presence in the internationalised capitalist market. Furthermore, we claimed that the political liberalization of Greece after the autumn of the military absolutism was a cardinal event since it signalled the loss of its traditional comparative advantage, viz. its low labor cost. However, this does non reflect an irrational governmental policy but the mutual exclusiveness of public assistance policies with developing states set abouting dependant development.

The three issues/topics studied show that Greece ‘s trade policy has resulted in a negative trade public presentation and a changeless shortage in the balance of trade. Therefore, it is non hard to demo how the trade shortage contributed to the debt trap in which Greece caught itself. The turning shortage in the current history was financed by bank loans or foreign direct investing through the excess accumulated by nucleus states like France and Germany. Since no effort was made to heighten Greece ‘s fight the funding of the current history shortage through loans became a recurrent form and contributed to Greece ‘s turning debt load.