Greece to boost economy with EUR6.8B stimulus

ATHENS (AFP) – Greek Prime Minister Kyriakos Mitsotakis said last Sunday Athens would spend an extra EUR6.8 billion (USD8.0 billion) to fight the coronavirus’s impact on the country’s economy.

A slew of new outlays will include slashing companies’ social contributions, creating 100,000 jobs and tax cuts for residents on tourist islands that have suffered from the pandemic’s impact on travel, the PM told journalists in the port city Thessaloniki.

Mitsotakis added that he would extend out-of-work benefits for an extra two months, in the country with the highest unemployment rate in the eurozone.

The measures come on top of a EUR24-billion package decided in spring.

Greek output shrank by 15.2 per cent in the second quarter, and Mitsotakis forecast a contraction of “between eight and nine per cent of GDP” over the full year before a 2021 rebound. Greece’s central bank predicts GDP down 5.8 per cent this year, while the International Monetary Fund’s outlook is for a 10-per cent plunge.

While the tourism sector brought in more than EUR18 billion for the Greek economy last year, the 2020 take may reach only 3.5 billion according to the SETE industry group.

Over the decade of its agonising debt crisis from 2008-18, Greek GDP shrank by almost one-quarter.

The country had returned to growth in recent years, but its economy remains delicate.

Although Greece has suffered less from the coronavirus than its European neighbours, recording just 305 deaths so far, the strict lockdown imposed for six weeks in spring brought activity to a halt and delayed the start of tourist season.

Passengers wearing protective face masks against the spread of the new coronavirus disembark from a ship at the port of Piraeus, near Athens. PHOTO: AP