NEWS

Greek economy hangs in the balance

greek-economy-hangs-in-the-balance

The complications with the European Union’s handling of vaccine procurement and the mutations of the virus not only affect Greece’s vaccination schedule. They also introduce a level of considerable uncertainty as to when the economy will reopen.

Previous estimates that economic life could return to a sort of normal by April now appear decidedly questionable.

It was also thought that, by the end of March, 20-25 percent of the population would be vaccinated. It now appears that half that number of people will be, if everything goes well: The new target is for 1 million vaccinations, or about 10% of the population, by end-March.

It is also hard to predict how tourism will pan out next summer. Any hopes for a strong recovery require a strong tourism season. But, at this juncture, things appear even gloomier than last year. People are more afraid of the virus and its spread. Like last year, the early tourist season of April and May must be considered a total loss; hopes hinge on an explosion in bookings starting in June.

Government officials that are best placed to know about developments in the European Union and to estimate the availability of vaccines for Greece say that, by the end of May, about 25-30% of the population will have been vaccinated. This would include the over-70s, vulnerable groups and professionals with multiple interactions with other people.

In any case, officials believe that February and March will be very difficult months, since cold weather helps the spread of the virus and makes lifting lockdown measures very unlikely.

Prime Minister Kyriakos Mitsotakis is in no hurry to lift restrictions. If anything, he errs on the side of caution: The epidemiological data, on their own, did not point to the region of Attica being declared a “red zone” Friday, but the government, above all, feared a relaxation that would fuel an explosion in cases that could spin out of control. Ideally, Mitsotakis would like to see restrictions lifted starting in April.

Keeping restrictions in place also negatively affects the public purse. In the 2021 budget, the government had set aside €7.5 billion to prop up employees and businesses affected by the pandemic. This amount appeared to be, and still is, adequate, but it won’t be if the pandemic persists beyond the end of spring.