This paper estimates the effects on the Greek trade balance that were caused
by the EU accession. A full trade model was used, since the country relies on
imported inputs for export production. The residuals approach was implemented.
The gradual liberalization of Greek trade through the abolition of tariffs, quotas,
financial stringencies and export subsidies, and the harmonization of the
indirect tax system, which took place over the 1981-1992 period, led to a
substantial increase in the country's trade deficit. This impact was mainly
caused by the large increase in imports, as the effect of accession on exports
was quite small.
