Economic activity still on hold in anticipation of government program

Economic activity remains in a lull, as businesspeople are waiting for the government to clarify its policies. In certain sectors such as tourism, recorded investments have been suspended, even renovations, while in other areas such as retail commerce, there is concern about the near future, especially if the government commences with radical changes to labor relations, opening hours and market regulations.

Described as a “freeze,” if temporary, or as a revision of business plans, the stagnation of economic activity that started when the presidential election was brought forward in December will soon translate into a decline in turnover.

Ioannis Papageorgakis, the president of the Association of Athens Commercial Representatives and Distributors (SEADA), says that there has been a drastic reduction in the supply of commodities from abroad in recent weeks. The most notable example is the tourism sector, with hoteliers opting not to order products from abroad and suspending hotel renovations even in destinations such as Rhodes.

At the same time, foreign suppliers’ demand for upfront payment of 100 percent of the orders’ value – a practice that started in mid-December – is continuing after the general election.

Most foreign investors are also waiting, as their interest either concerns privatizations or investments in Greek private firms. “The dust has not settled yet, it is too early for them to make any decisions,” a high-ranking state organization official involved in attracting investments has told Kathimerini.

“Some investment plans that we did not expect to proceed, especially since they concern the energy sector, are going on. It is certain, though, that if there are more ministry statements about privatization cancellations, there will be a problem,” a lawyer from a major firm with expertise in international acquisitions said.

Major retail groups are also concerned about the government’s intention to impose changes on labor relations, such as a hike in the minimum monthly wage to 751 euros, and the sector’s operations.