A Police officer wearing a protective face mask in Athens, Greece. (Representational photo: Reuters)

10 Years Put up Worst Financial Disaster, Greece Once more Faces the Ghastly Spectre of Recession Amid Virus

A Police officer wearing a protective face mask in Athens, Greece. (Representational photo: Reuters)

A Police officer carrying a protecting face masks in Athens, Greece. (Representational photograph: Reuters)

Although the nation has to date been spared the loss of life toll of different European nations at fewer than 150 fatalities from Covid-19, it won’t escape the ensuing financial downturn, Prime Minister Kyriakos Mitsotakis warned this week.

  • AFP Athens
  • Final Up to date: Might 2, 2020, 10:13 AM IST

Ten years after sinking into its worst financial disaster in dwelling reminiscence, Greece as soon as once more faces the spectre of a grave recession within the midst of a world coronavirus lockdown.

Although the nation has to date been spared the loss of life toll of different European nations at fewer than 150 fatalities from COVID-19, it won’t escape the ensuing financial downturn, Prime Minister Kyriakos Mitsotakis warned this week.

“The results of this coronavirus assault will undoubtedly be dramatic,” he instructed parliament on Thursday.

“We all know with certainty that (the recession) will likely be deep… we do not know the way lengthy the well being disaster will final, we do not but know if we’ll have tourism.”

Tourism is one in all Greece’s most vital sources of income, together with transport.

The Greek state alone may lose 8-10 billion euros ($8.8-11 billion) in earnings this yr, the prime minister mentioned.

WHERE’S THE MONEY?

Greece has already adopted measures price 17.5 billion euros, or 10 % of nationwide output, to help companies and staff, Mitsotakis mentioned.

Together with EU funds, the package deal will attain 24 billion euros, he mentioned.

However the opposition has questioned whether or not the cash has really reached the supposed recipients.

“The place is that this cash? It is good for bulletins however precise companies and (staff) haven’t acquired a single euro,” former leftist prime minister Alexis Tsipras mentioned Thursday, predicting that layoffs will quickly be “uncontrolled”.

Greece this yr had been relying on a development spurt of two.Four %. After exiting the ultimate debt disaster bailout in 2018, its borrowing charges had been at historic lows — in October Athens even bought treasury payments at a unfavorable charge — and it has money reserves of greater than 36 billion euros at hand.

However with most of its economic system in virus quarantine since March and world lockdowns anticipated to wreak havoc on tourism, Greece is anticipated to sink right into a 10 % recession this yr, in keeping with the Worldwide Financial Fund.

‘IRREPARABLE’ DAMAGE

Panagiotis Petrakis, professor of finance on the College of Athens, argued that the financial blow will likely be much less extreme.

“The probably state of affairs is a six % contraction, supplied there isn’t a deterioration within the pandemic,” he instructed AFP.

Petrakis additionally believes that the financial influence of this disaster will likely be much less protracted. The IMF itself estimates a 5.5 % Greek restoration in 2021.

The Greek finance ministry says the downturn could possibly be restricted to 4.7 % by help measures, adopted by a 5.1 % rebound. The jobless charge will strategy 20 %, it mentioned Friday.

The federal government will start easing lockdown restrictions this month, with most outlets opening by Might 11 and eating places and year-round lodges following on June 1.

However few count on any international guests earlier than July.

Many Greek companies worry the injury will likely be irreparable, particularly with minimal two-metre (6.5-feet) social distancing necessities squeezing out clients.

“Final summer season I had 10 tables exterior and 10 inside. Now, I’ll simply have three tables exterior and I am purported to make do,” says Costas Gogos, proprietor of a tavern within the port of Rafina close to Athens.

“Many won’t even reopen, they will not handle with so few tables,” added a neighbouring restaurant proprietor.

MEMORIES OF 2010

It was on Might 2, 2010, when the socialist authorities of George Papandreou signed the primary of three eventual bailouts with the European Fee, the European Central Financial institution and the IMF that may whole 350 billion euros.

Per week earlier, Papandreou had surprised the nation by asserting the decision for worldwide help. His televised handle from the tiny island of Kastelorizo is indelibly etched within the nation’s collective reminiscence.

Within the years that adopted, 1 / 4 of Greek nationwide output could be worn out in wave upon wave of wage and pension cuts and tax hikes demanded by the so-called troika of collectors.

Unemployment soared to a excessive of 27 % earlier than finally falling to 16 % in March, nonetheless the best within the eurozone.

Dozens of common strikes and tons of of road protests would comply with, lots of them violent. In one of many worst incidents on Might 5, 2010, three folks died in a financial institution set on fireplace throughout an anti-austerity protest, one in all them a pregnant lady. The culprits had been by no means caught.

The disaster was sparked by reckless state spending and misreporting of fiscal knowledge to the EU. When revealed by Papandreou’s authorities, it precipitated Greece’s borrowing charges to spike past attain.

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