page_title: Economy of Greece
section_title: Eurozone entry
hierarchical_section_title: Economy of Greece / History / Eurozone entry
caption_attribution_description: Deutsch: Alle Eurobanknoten 2002English: Euro banknotes 2002Polski: Banknoty euro 2002
context_page_description: The economy of Greece is the 51st largest in the world with a nominal gross domestic product of $209.853 billion per annum. In terms of purchasing power parity, Greece is the world's 53rd largest economy, at $336.486 billion per annum. As of 2019, Greece is the sixteenth-largest economy in the 27-member European Union. According to IMF figures for 2018, Greece's GDP per capita was $20,317 at nominal value and $29,072 at purchasing power parity.
  Greece is a developed country with an economy based on the service and industrial sectors, with the agricultural sector contributing an estimated 4% of national economic output in 2017. Important Greek industries include tourism and shipping. With 18 million international tourists in 2013, Greece was the 7th most visited country in the European Union and 16th in the world. The Greek Merchant Navy is the largest in the world, with Greek-owned vessels accounting for 15% of global deadweight tonnage as of 2013. The increased demand for international maritime transportation between Greece and Asia has resulted in unprecedented investment in the shipping industry.
  The country is a significant agricultural producer within the EU.
context_section_description: Greece was accepted into the Economic and Monetary Union of the European Union by the European Council on 19 June 2000, based on a number of criteria (inflation rate, budget deficit, public debt, long-term interest rates, exchange rate) using 1999 as the reference year. After an audit commissioned by the incoming New Democracy government in 2004, Eurostat revealed that the statistics for the budget deficit had been under-reported.
  Most of the differences in the revised budget deficit numbers were due to a temporary change of accounting practices by the new government, i.e., recording expenses when military material was ordered rather than received. However, it was the retroactive application of ESA95 methodology (applied since 2000) by Eurostat, that finally raised the reference year (1999) budget deficit to 3.38% of GDP, thus exceeding the 3% limit. This led to claims that Greece (similar claims have been made about other European countries like Italy)
  had not actually met all five accession criteria, and the common perception that Greece entered the Eurozone through "falsified" deficit numbers.
  In the 2005 OECD report for Greece, it was clearly stated that "the impact of new accounting rules on the fiscal figures for the years 1997 to 1999 ranged from 0.7 to 1 percentage point of GDP; this retroactive change of methodology was responsible for the revised deficit exceeding 3% in 1999, the year of [Greece's] EMU membership qualification". The above led the Greek minister of finance to clarify that the 1999 budget deficit was below the prescribed 3% limit when calculated with the ESA79 methodology in force at the time of Greece's application, and thus the criteria had been met.
  The original accounting practice for military expenses was later restored in line with Eurostat recommendations, theoretically lowering even the ESA95-calculated 1999 Greek budget deficit to below 3% (an official Eurostat calculation is still pending for 1999).
  An error sometimes made is the confusion of discussion regarding Greece's Eurozone entry with the controversy regarding usage of derivatives' deals with U.S. Banks by Greece and other Eurozone countries to artificially reduce their reported budget deficits. A currency swap arranged with Goldman Sachs allowed Greece to "hide" 2.8 billion Euros of debt, however, this affected deficit values after 2001 (when Greece had already been admitted into the Eurozone) and is not related to Greece's Eurozone entry.
  A study of the period 1999–2009 by forensic accountants has found that data submitted to Eurostat by Greece, among other countries, had a statistical distribution indicative of manipulation; "Greece with a mean value of 17.74, shows the largest deviation from Benford's law among the members of the eurozone, followed by Belgium with a value of 17.21 and Austria with a value of 15.25".
caption: Greece entered the Eurozone in 2001
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