Political History of Modern-Day Greece Essay

Introduction

Greece might have held a strong presence since the ancient times, but Greece, as we know it today, is a pretty young nation, with its modern history only commencing after it attained its independence from the Ottoman Empire. Thus, the Republic of Greece was instated, and it operated on a democracy. Nonetheless, the administration at the time was highly controversial leading to the assassination of the then elected President Ioannis Kapodistrias. After the assassination, the brother of the slain president tried to take control of the country but failed, what followed was the Great Powers stepping in and making the country the Kingdom of Greece. Later on, the country was officially established as a Kingdom via the Treaty of Constantinople, and it was decided there would be a line of succession involving Otto's descendants to govern the Kingdom. The Otto's reign was not as successful as well as the thirty years of the rule were highly turbulent, that so the monarch dies in exile. These instabilities carried on into the 20th century, with the country experiencing military rule from 1967, nonetheless, since 1975 Greece has been a democratic republic (Pappas 5).

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The Modern-Day Political Climate

Today Grace is officially known as the Hellenic Republic, which is a republic that runs on a parliamentary democracy. From 1975 after the end of the monarch, Greece converted into a constitutional state. In line with the country's constitution, the executive power lies with the president of the republic and the government, nonetheless, after 1986, the powers of the president in the executive levels were reduced to ceremonial. The head of government is held by the prime minister, who the leader of the political party with a majority in parliament, while the Prime Minister on his or her recommendation appoints or dismisses members of the cabinet. The legislative powers in the country are exercised by the 300 seating parliamentarians, the statutes passed by the parliament signed into law by the president of the republic. Political seats at the parliamentary level are held for four years, after which elections are held. The main political leader currently was President Prokopis Pavlopoulos and the Prime Minister Alexis Tsipras both elected in 2015; the next elections are expected to be in 2020.

Restrictions and Openness to Foreign Investments

According to Awojobi (2), Greece has continued to present challenges in its investment climate for both local and foreign firms. Nonetheless, investment sentiments were noted to improve as from 2014, when the country undertook structural reforms that were mandated by its then bail-out program. By 2015, public confidence had broken despite 86 billion pounds between the government and its international creditors. The structural reforms that were undertaken were aimed at a smoothening foreign investment with the government pledging its commitment to ease and attract foreign investors. Nevertheless, the reforms have created challenges to investors; for instance, the nation implemented a fiscal policy that has seen broad and deep cuts in public expenditure and a significant rise in social security and labor taxation, that has impacted negatively on the attained labor market competitiveness previous attained via wage devaluation.

Greece has restrictions on foreign entities looking to establish equity ownership; the restriction is higher than those imposed in other OECD economies, as well as imposing foreign equity ownership in the utility sector, such as electricity. Previous governments had tried to liberalize such as entities as the electricity industry that had even witnessed the privatization of the state-owned Public Power Corporation (PPC), however, the new government blocked any possible privatization efforts. The Greek government announced its intentions to retain the majority of control in these public entities being privatized including other sectors of the economy that it believes are strategic. Foreign investors are also faced with land restrictions, whereby, they cannot buy land especially in particular islands across Greece, motherless, the foreign investor is allowed to trade in the Athens Stock Exchange at the same level as the locals' trade (Awojobi 3).

Taxation for Controlled Foreign Companies

Controlled Foreign Companies (CFC) are interrelated companies, and they are located in different countries with shareholders. The rules imposed on these companies in Greece are on taxation, tracking taxable income that should be taxed in Greece owing to the company effectiveness on its operations in Greece. Thus, taxes imposed on the foreign companies are taxes following relevant tax rates that are imposed following business activities. Thus, the company shall be taxed where the net revenue is realized from interest or any other financial interest the company might hold in Greece such as financial assets, dividends, incomes realized on the transfer of shares, and any form of income generated from intellectual property or real estate.

Business Facilitation in Greece

Recent years has seen Greece invest heavily in investment promotion agencies that are geared towards facilitating foreign investments in the country. Under the supervision of the Ministry of Economy Development, the government established the agency Enterprise Greece that has been mandated with investments, tourism, and exports coming from the country, thus selling Greece to the world as an attractive investment destination and business partner. Through Enterprise Greece potential investors can receive the full range of services that relate to international business relationships plus domestic business development for the international market. The agency is key towards streamlining the process involved in licensing for different investors for both local and international investors (Louri-Dendrinou 24).

The country has also established an online portal where business can register with ease, characterized by a clear business registration process that can also be utilized by foreign companies despite the information on the portal is available only Greek. Nonetheless, looking at an overview of the registration process for businesses in Greece, both domestic and foreign businesses have to register with the business chamber, undergo tax registry, social security, and register with the local municipalities. Small business entities can be registered without the presence of an attorney. However, large business organizations must be registered and involve the service of a legal counsel.

Facilitation of Business registration in Greece has also been enhanced by the country adopting the European Union (EU) definitions of small and medium-sized enterprises. These adaptations include, microenterprise being an entity that has fewer than ten employees with an annual turnover balance sheet lower than 2 million euros. The small enterprise is comprised of employees to exceeding 50 and annual balance sheet not exceeding 10 million pounds, while a medium-sized enterprise constitutes no more than 250 employees with an annual turnover not exceeding 50 million pounds. Adaptation of these guidelines by the EU has helped towards ease of classification and registration of businesses especially foreign firms in Greece (Louri-Dendrinou 26).

Regional and International Trade Associations

Greece is a member of varies regional and international trade blocks. Regional trade blocks are associations of nations at the governmental level and work towards trade promotion with the block and protect its member countries against foreign competitions, while protection against global competitions is established by setting tariffs on goods that are produced by the block members, offering government subsidies, and technical and non-tariff barriers. The regional blocks see member countries cooperate in more than trade such as security, climatic issue, and other issues affecting the region (Hart and Joan 1).

One of the vocal trade groups that Greece is a member is the European Union (EU) and the Organization for Security and Cooperation in Europe (OSCE), which has allowed the country to access to the largest international market in the world. Greece has benefited by having greater competition in service that creates a good business environment; there has been an elimination of trade barriers, lowered the costs of doing business, and enhanced business efficiency especially in the registry of foreign firms and export procedures. These trade associations have increased the business network for Greece enabling the country to have a wide market for its exports. Also, Greece has benefited from these trade associations from the measures they implement, for instance, there has been an immense reduction in paperwork involved in transacting cross-border trader and in the registration of foreign companies. There have also been huge strides towards harmonizing standards such as technical and safety standards, the introduction of a single operational currency, which saw the introduction of the euro that facilities ease in trade. Finally, they have eased the movement of people especially member state citizens who can now move freely between member states (Hart and Joan 3).

Works Cited

Awojobi, Omotola. "Does trade openness and financial liberalization foster growth: An empirical study of Greek economy?" International Journal of Social Economics 40.6 (2013): 537-555.

Hart, Jeffrey A., and Joan Edelman Spero. The politics of international economic relations. Routledge, 2013.

Louri-Dendrinou, Eleni. "Greece: Taking Stock." presentation at the London School of Economics and Political Science, October, available at http://www. lse. ac. uk/europeanInstitute/research/hellenicObservatory/CMS% 20pdf/Events/2014-2015-Research-Seminars/Eleni-Seminar-Powerpoint. pdf. 2014.

Pappas, Takis. Populism and crisis politics in Greece. Springer, 2014.