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There was some discussion of implementing currency controls in Greece following the country’s banking crisis, but the government has adhered to EU monetary policies. Despite ongoing economic weakness, the risk of Greece abandoning the euro which it joined in 2001 has receded. Sending money to Greece and transferring money from Greece is still a simple operation, as there are no restrictions on capital transfers.
Funds associated with investment in Greece may be freely converted to foreign currencies and repatriated. There are no restriction on imports or exports, but the outward transfer of foreign currency must be done through a licensed commercial bank. Residents and non-residents can hold both foreign currency and euro accounts both domestically and abroad, and there is no obligation to convert imported foreign currency into euros. As in the rest of the EU, the Greek government allows travellers to carry a maximum of US$10,000 in currency out of the country; any amount above this ceiling must be approved by the central bank. No constraints apply to currency being brought into Greece.
Monetary policy is determined by the European Central Bank (ECB). Greece’s central bank, the Bank of Greece is responsible for implementing the Eurosystem’s monetary policy in Greece and safeguarding the stability of the Greek financial system. Its primary objective is to ensure domestic price stability and support the general economic policy of the government. The central bank’s Supervision of Credit and Related Financial Institutions Department (SCRFID) supervises the banking sector.
The Greek economy has experienced one of the sharpest declines since the onset of the global economic downturn in 2008 and the subsequent Eurozone crisis, with the economy contracting by 29% in 2008-13. Its overexposed economy, mounting public debt and fleeing foreign capital threatened to drag down the regional economy and prompted talk of a possible exit from the EU. However, Greece was one of five countries to request a financial bailout from the EU and the International Monetary Fund (IMF), alongside Ireland, Portugal, Spain and Cyprus. EU and IMF authorities have awarded Greece two bailout packages, one worth €110bn in 2010 and a second worth €130bn in 2012.
In response, Greece has implemented a number of austerity and reform measures, including restructuring the banking sector, writing off sovereign debts, overhauling the tax system and reducing public spending. However, much work remains to be done before the Greek economy regains solid footing. The government is actively working to encourage foreign direct investment (FDI) in an effort to jumpstart growth and to reverse the wave of disinvestment since 2010. A new law introduced in 2013 (Law No. 4146/2013), introduced several new incentives for foreigners; for example, the law allows foreign nationals from non-EU countries that buy property over a value of €250,000 to obtain five-year renewable residency permits. The government also created a single investment promotion agency in 2014, Enterprise Greece, which is expected to streamline and accelerate FDI procedures. Despite such attempts at reform, the policy environment remains overly bureaucratic and opaque. After six years of the economy contacting, GDP growth may have finally turned positive in 2014, but will remain weak in the coming years.
The euro, which replaced the drachma in 2001, is made up of 100 cents. Euro banknotes are printed in denominations of EUR5, EUR10, EUR20, EUR50, EUR100, EUR200 and EUR500. Coins are available in values of 1, 2, 5, 10, 20 and 50 cents, and EUR1 and EUR2. Each member country’s central bank issues its own banknotes and coins; the latter have national designs on one side and common designs on the other. Euro currency from any country is accepted within the currency zone.
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