Greece to boost economy with 6.8-billion-euro stimulus

Greek Prime Minister Kyriakos Mitsotakis said on Sunday, September 13, Athens would spend an extra 6.8 billion euros ($8 billion) to fight the coronavirus’ impact on the country’s economy.

A slew of new outlays will include slashing companies’ social contributions, creating 100,000 jobs, and tax cuts for residents on tourist islands that have suffered from the pandemic’s impact on travel, the PM told journalists in the port city Thessaloniki.

Mitsotakis added that he would extend out-of-work benefits for an extra two months, in the country with the highest unemployment rate in the eurozone.

The measures come on top of a 24-billion-euro package decided in spring.

Greek output shrank by 15.2% in the 2nd quarter, and Mitsotakis forecast a contraction of “between 8% and 9% of GDP (gross domestic product)” over the full year before a 2021 rebound.

Greece’s central bank predicts GDP down 5.8% this year, while the International Monetary Fund’s outlook is for a 10% plunge.

While the tourism sector brought in more than 18 billion euros for the Greek economy last year, the 2020 take may reach only 3.5 billion, according to the SETE industry group.

Over the decade of its agonizing debt crisis from 2008 to 2018, Greek GDP shrank by almost one-quarter.

The country had returned to growth in recent years, but its economy remains delicate.

Although Greece has suffered less from the coronavirus than its European neighbors, recording just 305 deaths so far, the strict lockdown imposed for 6 weeks in spring brought activity to a halt and delayed the start of tourist season. – Rappler.com