Package of 3.8 bln euros to keep Greek economy afloat

Package of 3.8 bln euros to keep Greek economy afloat

The government on Wednesday announced a 3.8-billion-euro package of measures to soften the blow to the economy from the coronavirus epidemic. The package aims to support workers, the self-employed and enterprises, as the first mass layoffs have already been recorded and the risk of a painful recession is looming large.

Finance Minister Christos Staikouras estimated that growth this year will come to zero. A government source told Kathimerini on Wednesday that, “for us, the key is tourism. If the summer is missed, we will risk a heavy recession.” Tourism accounts for 12 percent of Greece’s gross domestic product and has a strong multiplier effect, supporting a series of other activities.

Wednesday’s measures, announced by Staikouras, his deputy Thodoris Skylakakis and the ministers of development, Adonis Georgiadis, and labor, Yiannis Vroutsis, cover the second stage of the crisis: After the suspension of the tax and social security obligations of corporations ordered to close by the state, the government is now expanding the measure to businesses that while not having been ordered to close have still been harmed by the current crisis, and is proceeding to the provision of liquidity with the state taking the role of banker.

Therefore the state is extending a “returnable deposit” to companies – in practice a low-interest state loan with a grace period, adding up to 1 billion euros.

Workers who have either been laid off or whose companies have been shut by the government are at the center of the new measures, not only because they will be granted a handout of 800 euros each in April, but also because the preservation of jobs is a necessary condition for any support to enterprises. Vroutsis said the situation in the labor market this month is “disappointing to tragic,” with layoffs since the start of the month amounting to 35,000. Another 1 billion euros will go to the 800,000 workers at hurt or shuttered companies, self-employed professionals and personal companies.

The government also announced the reduction of value-added tax on products that help contain the spread of the virus, such as gloves, masks and antiseptics, the postponement of the adjustment of taxable rates for properties, and the reduction of commercial rents by 40 percent.

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