The Absorption of a Shadow Economy in the Greek GDP

The aim of this paper is to explain why a small part of shadow economy was absorbed by the Greek GDP once in 2008 and the necessity to do so again in order to overcome the current economic/debt crisis in Greece. It is believed that the negative result of the austerity measures that were imposed to the countries which have been hit by the sovereign debt crisis create a decisive European issue. The size of the shadow economy in Greece is debateable although there is research that estimates it between 28%-30%. Also, the majority of people in Greece during the current economic crisis are trying to balance “the lost part” of their income through their participation in the shadow economy. In the previous years, Eurostat had expressed its reservations on the credibility of the quality of the Greek debt and deficit figures. Specifically, Eurostat had publicly expressed doubts on the debt and deficit figures transmitted by the Greek authorities since 2002 by the way of “footnotes” or specific comments in the press releases where these figures are published. Also, Eurostat continued to express its reservations on the data presented at the notification of March 2004. Because of the present Greek sovereign debt crisis, the authors of this paper present their opinion that part of the shadow economy must be adopted in the Greek GDP and become part of the official economy.