FINANCE

Government ‘praying’ for reopening

Staikouras stresses that safety is paramount, but adds each lockdown week costs €750 mln

government-praying-for-reopening

The increase in coronavirus cases and the repeated disappointments as far as the reopening of retail is concerned are increasing the pressure on the Finance Ministry, which changes its plans from week to week.

It is now leaving open the possibility of an eighth phase of the cheap state loans program, without the seventh having started yet as it is expected to next month.

“We’ll see,” is the vague response ministry officials give to questions regarding another stage of the so-called “Deposit To Be Returned” program, with one of them adding that “we will support the enterprises that will remain shut.” Therefore the longer the lockdown is extended, the stronger the likelihood of a new phase. The upcoming seventh phase is projected to have a budget of 1 billion euros, against less than €500 million in the sixth.

Meanwhile the bill for the support measures keeps growing. Sources say the total cost has already topped the European Commission estimate of €11.6 billion by more than a billion. Estimates now put the total figure close to €13 billion – while the budget had provided for €7.5 billion.

Minister Christos Staikouras told Skai TV on Wednesday that the cost of extending the lockdown after March 22 will amount to €750 million each week. Half of that would be the loss of state revenues, and the rest from the additional expenditure required. He reiterated that the total cost of the full lockdown comes to €3 billion every month.

The minister stressed that the government has to be cautious so that the budget is not derailed and for the country to continue to tap the money markets. “We are praying for the economy to operate with safety,” he responded to a question as to whether the ministry is praying for the market to reopen quickly. Staikouras also expressed hope that part of the €20 billion in savings will be channeled into the market, with €10 billion concerning household savings and €10 billion saved by enterprises.