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Greek FinMin says recession at 16% in Q2, expects total at 8% in 2020

Greece’s Finance Minister Christos Staikouras has admitted that the economy will contract by 16% in the second quarter of 2020 but claimed that it will close to 8% in 2020.

Speaking to Thema FM, Staikouras said that the economy will contract by 16% in the second quarter. “However, based on current data, we expect an economic recession of up to 8% in 2020,” the Finance Minister noted.

He said that the country’s cash reserves totaled 37.5 billion euros, boosted by two successful bond issues and higher Treasury bill issues. He stressed that Greece will return to international capital markets in the June-July period and reiterated “ we will not a problem with our cash reserves, even if there is a second outbreak of the pandemic.”

Staikouras said he expected the economy to begin operating by the end of June, although not at maximum level. He said the government has asked the European Commission to allow state subsidies to larger loss-making enterprises.

The Finance Minister promised targeted measures from now on, as the shadow of the coronavirus still lies heavy on Greece’s economy.

The country’s number one industry, the tourism, cannot overcome the shock of the pandemic.

“There are  sections of the Greek economy that have restarted, while some geographical regions are performing better than others. But there are also areas such as the islands that have not restarted yet.

“Tourism on the islands does not exist or has begun to take the first timid steps,” Staikouras said.

This, combined with the major problem facing the restaurants industry, has put the financial staff on alert for a new “package” of support to tackle the shocks of the pandemic crisis.

“There is an issue with the restaurants sector and we are here with more targeted actions to react in the near future to support professional teams and geographical areas depending on the size of the problem,” Staikouras said.

“The recession in the second quarter of 2020 is much higher than the government’s forecast of 16%, on the one hand because it is the period of the global lockdown, on the other hand because there are thousands of companies that have not yet rolled out,” notes daily efsyn.

As much as the government is in a hurry to restore normalcy, the situation in the economy is much worse and is expected to worsen if the pandemic returns in October and the country enters a second quarantine.

Greeks speak already of the current economic situation as similar to the one in “2011-2012” when the implementation of the first bailout agreement kicked off and millions found themselves without income within a couple of months.

PS So far the government support measures have been two bags of peanuts with people trying to make 3-month ends meet with 800 euros. Possible? Impossible. Additional payments to be handed out as of July are at the level of 514 euros.

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