An Unlikely Boom

Greek folklore has it that when God made the earth, he picked out all the stones from the soil, threw them in a pile and called it Greece. For centuries this poverty-plagued country has been the poor stepchild of one foreign power after another, rarely able to pay its bills or manage its economic destiny without the aid of wealthier neighbors. All that is changing now, as the progeny of Herodotus and Homer ride high on one of Europe's least expected booms. Per capita income has climbed to $ 1,200 a year, spurred by an economic growth rate of 10.5% last year that left the rest of Europe far behind. In the past five years the number of autos in Greece has doubled, and the use of electricity has more than tripled. In remote mountain villages, TV antennas sprout from roofs like aluminum saplings, feeling the air for telecasts of AOTET and MHONANTEA (I Love Lucy and Bonanza).

The economy, slowly revving up since the late 1940s with the help of a steady infusion of American economic and military aid, has lately taken off under the austere stewardship of the rightist military regime of Colonel George Papadopoulos. The junta, which seized power in a bloodless 1967 coup, has wooed foreign investors with tax breaks and low-interest loans, and has helped to create a healthy business climate by ruthlessly suppressing political unrest. By last December, when postwar American aid had reached $3.95 billion, the regime announced proudly that further handouts would no longer be needed.

In the past two decades, private American investors have poured some $275 million into the Greek economy, dotting the landscape with factories bearing such names as Dow Chemical, Goodyear, Upjohn, Westinghouse. Lately, officers of Alcoa have been discussing construction of a $100 million aluminum plant.

Greece also is getting a kind of fallout from the general prosperity of Western Europe, which has increased the nation's tourist revenues and the remittances sent home by Greeks working abroad. The Papadopoulos government has persuaded Greeks to put the money to work within their own country, partly by dampening dissent--Greek businessmen need not fear strikes--and partly by promotional schemes, including a campaign to get Greeks to invest their savings in the local stock market. A building boom has followed, and tens of thousands of Greeks have begun returning from West Germany, Canada and the U.S. to cash in on the resulting labor shortage. While abroad, many of them also developed entrepreneurial and managerial skills. Even Greek restaurant owners, expatriate fixtures in cities round the globe, are returning. Says Nick Sokaris, U.S.-born son of an Albany, N.Y., restaurateur, who opened his own Stage Coach restaurant in Athens in mid-1971: "I had to decide whether to stay in Greece or go back to the States, and I decided the real opportunity was in Greece. The restaurant is a success now, and there is room in Athens for 20 more just like it."

Greek shipowners, who for decades made their headquarters in London and Manhattan, are also being lured back. The government has built one of Europe's most advanced communications systems, which lets them stay in touch not only with the world's shipping markets but also with their own far-flung vessels. Even small offices are now routinely equipped with the latest teleprinter facilities as well as direct-dial connections to U.S. and Canadian ports.

There is a dark side to prosperity: after many years of stable prices, the country is running into serious inflation. The 1972 inflation rate was about 4%, according to the official government index, but there was also a booming black market in food and other consumer items, an outgrowth of government price controls. The black market prices --what Greeks refer to as "the hat" --are the difference between what the government says the local butcher can charge for a piece of veal, and what the shopper actually has to pay for it.

Some Athenians say that the hat is driving their household expenses up by 15% a year.

Prosperity is depopulating the countryside. For the first time, more than half the population lives in towns and cities of at least 20,000. Everywhere, olives and citrus fruits hang rotting from branches, waiting for pickers who have left for the cities.

In spite of inflation.

Greeks seem eager for more of the modern economy, and the emergence of a new class of entrepreneurs holds out a promise that they will get it.

To a majority of them, the Papadopoulos rule seems a tolerable annoyance when weighed against the benefits of growth. More businessmen may soon be investing, particularly if other governments continue to put controls on investments by foreigners to halt speculation in the dollar. As a developing country, Greece has used its foreign currency to import needed goods, and it has no surplus of dollars. Thus it is likely to remain a nation in which a foreigner can freely bring in capital and start a business.

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