BUSINESS

Greece, Arizona share some similarities — but more differences

Russ Wiles
The Republic | azcentral.com
  • Greece's weekend referendum raises the likelihood the country could exit the Eurozone. In terms of economic impact%2C it would be like Arizona leaving the U.S.
  • Arizona generates about 1.6 percent of U.S. Gross Domestic Product%2C similar to Greece's impact within the Eurozone. The two nations also are similar in population and area impact
  • But many more Greeks are jobless compared to Arizonans%2C and Greece's public-sector debt is higher than the public-sector debt owed by Arizonans
A sign outside the Bank of Greece in Athens is defaced with graffiti to read 'Banque de Merkel.' Politicians in Europe and Greece are planning emergency talks after Greek voters rejected EU proposals to pay back its creditors creating an uncertain future for Greece.

Greece's economic future is in doubt after a weekend referendum that rejected tax increases and austerity measures, leaving pundits wondering what the nation's possible exit from the Eurozone might look like. Nobody really knows. If that happened, in some respects, it could be like Arizona abandoning the dollar and the U.S. economic system.

In terms of economic impact and a few other characteristics, Arizona and Greece are surprisingly alike. But they're more dissimilar in other respects, especially those reflecting debt.

Here are some of the ways in which Greece and Arizona measure up, with the exercise designed primarily to put the Greek economic crisis into context:

Population

The nearly 11 million Greeks make up 2.1 percent of the population among eurozone nations — those that use the euro as their currency. The roughly 6.7 million Arizonans similarly weigh in at around 2.1 percent of the population of the United States.

Geography

Greece accounts for 3 percent of the land area of the eurozone, and Arizona makes up 3 percent of U.S. area. But landlocked Arizona has few other similarities to Greece, with its thousands of islands, beaches and bays. One interesting note: If Greece left, the eurozone would lose one-fifth of its coastline.

Economic impact

As a relatively unprosperous nation by Western European standards, Greece contributes roughly 1.6 percent of the total Gross Domestic Product of the eurozone. Arizona accounts for 1.6 percent of U.S. economic output.

Prosperity

Up until the debt crisis really came home to roost this year, Greeks earned about $25,800 on average, giving them 67 percent of the per-capita income of the eurozone overall. Arizonans earn about $38,700 on average, or about 70 percent of the U.S. average.

Jobless rate

You could say Greece and Arizona both have above-average unemployment, but that hardly tells the story. Arizona's jobless level of 5.8 percent is only a bit above the U.S. rate of 5.3 percent and has been falling. About 26 percent of Greeks are out of work, or nearly three times the number of Europeans, and Greek joblessness likely will rise.

Leading industries

Greece and Arizona both are sun-soaked places dominated by services and tourism. But there the similarities end. Greece's top industries such as food processing, textiles and shipping differ from Arizona's greater focus on aircraft parts, semiconductors, solar energy, homebuilding and copper.

Public-sector debt

Overall debts accumulated by Arizona's state government and counties, cities, education system and other entities here total $43 billion. Greeks, by contrast, owe 250 billion euros (about $275 billion) on their public debt. If you include the share of the $18.2 trillion federal debt owed by Arizonans, that would add about $380 billion to Arizona's total.

Debt relative to GDP

This is the bottom line and explains why Greece is in trouble. Greece's debt in 2014 was 177 percent of annual economic output, putting it well above the eurozone average of 92 percent and the U.S. figure around 100 percent (reflecting federal debt only). Plus, Greece's economy has shrunk over the past six-plus years, while the U.S. is growing again.

Sources: CIA World Factbook, International Monetary Fund, Eurostat, Bank of Greece, U.S. Census Bureau, Bureau of Labor Statistics.