Greece extends pandemic support as economy seen rebounding this year

FILE PHOTO: Beaches officially reopen to the public, in Athens
FILE PHOTO: A general view of a beach during the official reopening of beaches to the public, following the easing of measures against the spread of the coronavirus disease (COVID-19), in Athens, Greece, May 8, 2021. REUTERS/Costas Baltas

September 13, 2021

ATHENS (Reuters) -Greece said on Monday it will pump more money into its economy to prop up businesses and households battered by the pandemic, as a stronger-than-expected growth forecast for the year gave it the fiscal leeway for a raft of relief measures.

Greece emerged from a decade-long financial crisis in 2018 but saw its economy slump again by 8.2% last year amid restrictions to curb the spread of COVID-19, which also hurt its vital tourism industry.

This year, the economy is set to rebound by 5.9%, higher than the 3.6% previously forecast, Prime Minister Kyriakos Mitsotakis said on Saturday, as he outlined a series of tax relief measures.

Finance Minister Christos Skaikouras on Monday said that projection was “absolutely realistic. It may even prove to be conservative”.

The government would spend 4.4 billion euros in the second half of the year, bringing the total amount of pandemic support for 2020-2022 to 42.7 billion euros, Staikouras said.

Greece was also mulling its first issue of a green bond, Staikouras said, joining a number of European countries that have issued green debt to finance projects with environmental benefits.

He did not give a timeframe but a senior finance ministry official said it could take place in the second half of next year and “would have to incorporate mature projects before being issued”.

Since exiting years of bailouts by the European Union and International Monetary Fund in 2018, Greece has relied solely on the markets for its financing needs. Staikouras said the government was considering an early repayment of loans to the IMF and to euro zone countries.

A finance ministry official said that could take place in 2021 or 2022.

(Reporting by Lefteris Papadimas and Karolina Tagaris; Editing by Alex Richardson)