Profile

After the disastrous civil war in the 1940's, which ended with the banning of the Communist Party (KKE), and periods of military rule in the 1960's and 1970's, the current constitution was introduced in June 1975. Greece finally joined the EC in 1981 and has gradually been reorienting it's foreign policy towards that of the EC, not least because of the money that Greece was eligible to receive from the EC's structural funds. However, links with the USA have remained important until the recent period, as Greece wants to maintain the traditional 7:10 ratio for US military aid to Greece and Turkey. Arguments with Turkey over Cyprus and mineral rights in the Aegean have not helped to create a working friendly climate between these two neighbours but the important of these disputes appear to be slowly becoming less significant in terms of hostel tension as relationships are becoming more normalised in a non-hostile manner.

In order to have taken advantage of the EC's structural funds, Greece negotiated an initial 2.2 billion Euro load from the EU, the first trance of which was paid at the beginning of 1991 and almost from the beginning was associated with an economic upturn. In return for the loan Greece was encouraged to implement an austerity programme, which aimed at reducing inflation by reforming the bureaucracy widely criticised by Greek businesses as well as provisional foreign investors as a serious barrier to the operation to the single market and reducing the public sector deficit. So successful was this assistance from the EC that Greece, as a member of the European Monetary Union had sufficiently enough stabilized its economy with effective and disciplined monetary and fiscal policy, that it now has the very stable Euro as its monetary unit. The gap between Greece and the EC in terms of GDP per head was large but is diminishing despite Greece's relative geographical isolation, which was emphasised by its isolation during the fighting in Yugoslavia and for a short term, the rise of ethnic tension in the Balkans, which renewed ethnic tensions in Greece.