Support plan on seven pillars
The Finance Ministry is working on a plan for restarting economic activity once the coronavirus storm subsides, consisting of seven key steps.
The plan’s final form will depend on the course of the health crisis. This is why a recent government meeting on the economy was also attended by the chief Health Ministry adviser and spokesman for the coronavirus, Sotiris Tsiodras, who presented his estimates on the course of the pandemic.
The main pillars of the economic recovery plan are the further reduction of corporate taxes and social security contributions, the acceleration of amortizations aiming at strengthening investments, introducing numerous tranches for debts to tax authorities and social security funds amassed over this period, and the utilization of all available instruments, mainly European resources, for injecting the economy with liquidity. The ministry is also seeking some form of support from the state through corporate bonds.
For tourism especially, the plan will provide for targeted interventions in order to render Greek tourism packages even more attractive, such as the abolition of the levy per night's stay.
The blow to the economy is expected to be heavy and it remains to be seen how far these measures will be able to soften it. It is estimated that every month existing restrictions stay in place hampering the economy, means a deduction of about 2 percent from the gross domestic product and a fiscal hole of 6 billion euros, increasing the pressure for a return to normalcy.
Greece is expected to resort to a new bond issue, now that it also enjoys the safety net of the new quantitative easing program from the European Central Bank. Credit sector sources say Greece will monitor what other issuers are doing and act accordingly, aiming not so much at the interest rate or at drawing major sums, but at declaring its presence. A 10-year bond issue of 1.5 billion euros would also be a useful benchmark for corporate bonds.
