Geert Bekaert and Campbell R. Harvey's

Chronology of Economic, Political and Financial Events in Emerging Markets

Greece

Major Political and Economic Events

Date

750308

The Drachma's link to the U.S. dollar severed. Controlled floating exchange rate to be determined vis-à-vis a "basket of currencies."^a

8005

Banks allowed to freely set interest rates and other terms for deposits in U.S. dollars, Canadian Dollars, and Pounds Sterling.^a

8011

Interbank foreign exchange market began full operations.^a

801211

Quotation for the Drachma was introduced on the Paris Bourse.^a

810101

Greece joins the EEC. Greece was allotted five years to eliminate all currency, tariff and other restrictions on trade with EEC members and to lower tariffs on non-EEC imports to community levels.^a

840101

All advance import deposit requirements were abolished, as were restrictions on import financing.^a

8409

Non-residents permitted to open time deposits with local banks, and banks were authorized to lend abroad Drachma derived from the conversion of foreign currencies.^a

860519

All restrictions applying to residents of other EC countries on the liquidation of investments and the repatriation of profits and dividends on such investments were abolished.^{a3(first entry)}

8606

Non-resident investments restricted through block accounts.^a

860725

Upon specific approval of the Bank of Greece, direct investments by non-EC residents in Greece may be accorded treatment similar to those applicable to EC residents.^a3

8608

Block account restrictions removed for European investors. European Community nationals permitted to invest freely in Greek securities.

8608

Kim and Singal Liberalization date.

8700

IFC Liberalization date for European investors.^g

8700

Liberalization of currency controls in 1987 allowed foreigners to participate in the equity market and to repatriate their capital gains.^q

8700

Greece liberates 190 of the biggest State-controlled enterprises and announces further privatization.^a

870101

VAT system was begun.^a

8712

Bekaert/Harvey Official Liberalization date. [Final and NBER version].

880101

VAT system modified.^a

8808

First ADR announced.^aa

8809

Greece Fund Limited launched on the London Stock Exchange with net asset value of $46.3 million as of December 1991.^aa

881123

Direct investment in the EC countries by Greek residents was liberalized. But prior authorization would be required until June 30, 1989. ^{Residents were allowed to purchase securities issued by the EC or the European Investment Bank up to a global limit of ECU 50 million a year. Personal capital transfers by Greek residents to EC residents were completely liberalized. a3}

8812

IFC Liberalization date.ⁱ

8812

First exchange-traded overseas listing.^a9

8800

The introduction of the Insider Trading Laws.^a4

890309

The maturity of loans in foreign exchange by contracting by exporting firms was permitted to be less than six months.^a3

890701

Direct investments by residents of Greece in EC countries were fully liberalized.^a3

901017

ADR effective date. (Company=JOHN BOUTARI & SON WINES & SPIRITS S.A. - COMMON, Exchange=OTC)^a11

9100

Foreign exchange restrictions removed for investments (domestic investors investing abroad) into EC countries.^h

920611

The residents were allowed to aquire dividends, bond and shares issued by legal entities and invest in real estate located in non-EC member countries under the same terms and conditions as those in EC member countries.^a3

920617

Credit institutions established in Greece were allowed to lend to individuals permanently residing abroad with their own resources or with borrowing in foreign exchange for acquisition of real estate in Greece.^a3

9207

Parliament votes to support the Maastricht Treaty.

9209

Electronic trading on Athens Stock Exchange is introduced.

9211

Greek SEC allows repurchase agreements, but postponed the liberalization of commissions on stock transactions.

9303

EU pushed Greek privatization.

930323

All capital transactions with EU member countries were liberalized, except financial credits and loans (including personal loans) with an original maturity of less than one year.^a3

9305

Bank of Greece issued a directive permitting intra-EU capital movements with maturities longer than three months.

930630

All capital transactions with non-EU member countries were liberalized, except financial credits and loans (including personal loans) with an original maturity of less than one year, securities, other guarantees, rights of pledge investments in border regions, maritime transport, acquisition of mining rights, and participate in new or existing enterprises if engaged in radio and television broadcasting or air transport.^a3

9307

EU approved an aid package that will provide $17B for infrastructure and public works projects.

9309

Greek conservative party lost its majority in Parliament; Prime Minister dissolved Parliament.

9310

Socialist electoral victory.

9312

Finance Minister announced that no disclosure of origin will be required for funds entering the stock market and that no additional dividend taxes will be imposed on companies listed on the ASE.

9403

Announcement that OTE company will be privatized.

9404

Parliament passed a new tax bill that increased the corporate tax rate for companies not listed on the ASE from 35% to 40%. Restrictions removed on all capital movements governing both foreign investments and resident investments.

9405

Restrictions on short-term capital movements are lifted. Rumors that the drachma will be devaluated circulate. 

940516

(1) Remaining exchange controls on short-term capital movements (mainly loans and deposits with an original maturity less than one year) and some forward and swap contracts (for less than three months) were abolished; and (2) authorized credit institutions were also allowed to extend loans in any form and currency for nonresidents on freely negotiated terms.^a3

9406

Central Bank aggressively intervened to halt the devaluation of the drachma. Government introduced new plan.

9407

Athens Stock Exchange announced new rules that require all companies applying for a listing to submit a plan outlining how IPO funds will be used.

9409

Athens Stock Exchange introduces a new General Index.

9503

Constantinos Stephanopoulos elected President.

9505

Central Bank cut interest rates.

950516

Manufacturing firms were permitted to extend loans in foreign exchange to exporters and to hold deposits in foreign exchange with earned foreign exchange income.^a3

9510

Assassination attempt on President. Political instability in the ruling PASOK ruling party.

9511

Prime Minister is sent to intensive care unit of hospital.

960115

Prime Minister Andreas Papandreou resigned. Constantinos Simitis elected new PM and will continue economic reform program.

9603

OTE privatized this month.

9608

Investors speculate that Prime Minister Simitis may call an early general election.

9611

1997 budget announced - will abolish several tax breaks. Capital Markets Commission institutes reforms aimed at stopping improper trading practices.

9600

The first prosecution under the IT laws.^a4

9701

The country's rising prospects for entry into the European Monetary Union. The government is expected to raise approximately $1 billion from privatization.

9703

The escalation of the Albanian crisis.

9704

Inflation slowed to a 32-year low of 5.9% in April

9709

Athens had won its bid to host the 2004 Olympic Games.

9710

The stock market suffered from Hong Kong market crash. 

9711

Finance Minister promised to pass a tight 1998 budget and said Greece will uphold the "strong drachma" policy.

9803

The Drachma entered Europe's exchange-rate mechanism.

9804

Parliament approved the reform package to revamp the local air carrier and to manage the ongoing corporate consolidation and restructuring process.

9805

The government decided to devalue the drachma by 14%, relative to the European currency unit.

            9808

Finance Minister unveiled a draft bill easing some of the bourse’s listing requirements to  harmonize Greek law with European Union directives.

            9811

It was reported that Moody’s was likely to raise Greece’s Baa1 credit rating.

            9902

Three government ministers resigned amid news of their involvement in the arrest of Kurdish  Worker’s Party leader Abdullah Ocalan.

            9904

The government announced plans to sell a 14% stake (worth $1.6 billion) in Hellenic Telekom by the end of June.

9907

Officials' statement that recent gains in some stocks were not justified by their earning prospects turned investment sentiment bearish. The exchange's capital market committee, an oversight body, announced severe limits on margin financing and banned major shareholder trading prior to critical company announcements that were aimed at greater transparency and better supervision.

200003

A new stock exchange, NEXA, specializing in small companies, began operation.

200004

The PASOK party won election and Konstantinos Simitis continued as prime minister.

20000618

Greece was formally ratified to enter Enrozone, having met Maastrich criteria relating to inflation, public finances, interest rates, and currency stability.

200000

Inflation surged due to the rise in oil prices and the precipitous fall in the euro. The government proceeded cautiously on its program of reform and privatization. Greece adopted European Union stock exchange legislation, which permitted the operations of investment advisory services and brokers, and launched the Athens Derivative Exchange, initiating remote trading on HDAT and the government bond trading plat-form. Financial sector was privatized and European banks entered the local market. High productivity rate and profitability growth for Greek firms did not boost the markets. The 2004 Olympics was expected to benefit the Greek economy.

20010101

Greece officially became a full member of the Economic and Monetary Union (EMU).^ee

20010500

Pope John Paul II visits, asks for forgiveness for sins committed by Roman Catholics against Orthodox faith, in particular sacking of Constantinople (present-day Istanbul) by crusaders in 1204. ^b6

20020100

Euro replaces drachma.

20020204

PM announced to start welfare reforms in 2002

20020314

A wide range of anti-corruption measures were announced by the Interior Ministry.^b1

20020300

Greek, Turkish governments agree to build gas pipeline through which Turkey will supply Greece with gas.

20020600

Pension reforms approved by parliament.

20020700

Suspected leader and members of November 17 terror group arrested after one of them is injured, allegedly by his own bomb, and provides information to police. ^b6

20020719

New privatization bill introduced to parliament. The new legislation will allow the government to acquire shares in companies that will give the state the power to veto major decisions in denationalized utility companies.^b1

20020900

The Greek government has unveiled tax breaks in order to ease the burden on small business and low income families,

20030200

Sale of state-owned Olympic Airways failed.

20030215

Greek anti-war demonstrations turn violent

20030704

A minor government reshuffle was unveiled by Prime Minister Costas Simitis, falling far short of the radical changes expected.

20030900

Greece unveils plan to boost exports

20031000

Public sector workers strike to demand better pay

20030900

Trial of November 17 suspects ends with their conviction. Head of group and its main hit man jailed for life.

20011006

The Greek government announced that its promised Development Bill - a package of corporate tax cuts and other incentives designed to stimulate both domestic and foreign investment - was now ready to go to parliament.

20040208

Following Mr Simitis' decision to call March elections and stand down as Pasok leader, Yeoriyos Papandreou takes over as party chief.

20040300

Conservative New Democracy party led by Costas Karamanlis wins general election, ending over a decade of Pasok government. ^b6

20040500

Greek employers, unions sign two-year wage agreement, salaries rise by a nominal 6% in 2004 and 5.5% in 2005. ^b1

Year

Regulations on Foreign Investors

1995

Restrictions: no restrictions on investment or the inflow and repatriation of funds.

Taxation: 35% dividend tax rate and no tax on capital gains. ^{Double taxation is avoided for investors from some countries.a5(first entry)}

1998

Restrictions: No change.

Taxation: 35% dividend tax rate and no tax on capital gains. 0.3% tax on sale transactions. Double taxation is avoided for investors from some countries.^a5

2001

Restriction: energy and telecommunications sectors are open for investment. Restrictions exist on land purchases in border regions and on certain islands (on national security grounds). 

Taxation: no dividend tax. Corporate tax is 35%. ^b7