GIG Economic Bulletin – 20 December 2021

The ECB ended uncertainty over the Greek bond market by indicating that it is willing to continue supporting Greek debt.

Economic Bulletin
The European Central Bank has sent given a boost to the Greek bond market through the extension of its reinvestment programme in Greek debt, with the country now counting on some €5 billion of GGB purchases until the end of March 2022. Meanwhile, Greece’s property market is back in the spotlight on the back of an awaited shake-up of property taxes by the end of 2022, a return of investment funds to the market, and an upturn of Greece’s Golden Visa programme.


Unemployment remained stable at 13.3% in October, compared to 13% in September according to the Hellenic Statistical Authority (ELSTAT). The unemployment rate in October last year was 16.4%. The number of employed people increased by 97,774 on an annual basis, with total employment measuring just above 4 million.

November’s hiring balance was negative by just under 80,000 jobs, according to the latest data from the Labour Ministry’s Ergani database. This is the worst November on record since 2011, however the jobs balance remains positive over the year to date with 135,680 net hirings.

The import price index was up by an unprecedent 34% in October, leading to expectations of further price hikes in finished goods and exports. The Hellenic Federation of Enterprises (SEV) has warned that the cost of higher energy prices for manufacturing is estimated at €150 million a month.


Growth is now seen likely to reach 8%, while tax revenues have beat the target by €855 million over the first 11 months of the year, largely from corporate tax and indirect taxes. The government has indicated it plans to direct some of the funds to cushioning the effects of the energy crisis on consumers.


Total investments from the EU recovery programme and structural funds in 2022 are expected to top €11 billion, more than doubling the usual figure of €5 billion. Around €800 million in loans will be made available for private investment in the coming year through the four systemic banks.


The ECB has sent a strong signal of support for GGBs by extending its reinvestment programme until the end of 2024 and introducing additional flexibility in the case of Greece, while it was announced that the PEPP programme could resume if needed to counter additional pandemic shocks. Greece can expect up to €5 billion of GGB purchases until the end of March.

The announcement removed the uncertainty hanging over the market. The spread on the 10-year bond had hit 172 basis points at the start of the week, up from 100 points over the summer, but dropped to 152 basis points following the statement by ECB head Christine Lagarde.

Participation in the PDMA’s bond swap beat expectation by achieving 72% participation, compared to expectations below 45%. A total of €2.92 billion out of the outstanding €4 billion were swapped, with the state paying €1.1 billion in cash and €1.8 billion in new bond issues.


Over 30 companies have submitted proposals to Phaistos, the state-sponsored technology investment fund seeded with the proceeds from the auctioning of 5G licenses. Phaistos’ initial funding capacity is just under €100 million and is expected to increase significantly with private sector participation.

Real estate

The government is planning a shake-up of property taxes by the end of 2022 in a bid to boost the real estate market. Plans include axing the supplementary property tax on high value property portfolios, rationalising and automating the calculation of assessed values, as well as abolishing the 24% VAT on new build properties in line with the latest EU legislation.

Investment funds are set to return to the Greek property market, after an 18-month lull. Investments by real estate funds totalled €400 million in 2019. Piraeus Bank’s €1-billion Terra Project property portfolio is being eyed by Dromeus and Brookland Capital. Brookland is already involved in the Hellinikon project, while Dromeus is also looking to invest around €300 million in data centre and logistics infrastructure.

The Golden Visa programme looks set to exceed 2020 levels, with permits in the year to date reaching 989, compared to a total of 938 last year. Since it started 2014, the programme has approved 9,473 applications.

Since the Golden Visa programe started, Greece has issued a total of 9,473 permits to individual investors (28,411 including family members), with investments in real estate amounting approximately €2.33 bn. Copyright: Alexandros Michailidis /


Alpha Bank closed two securitisation deals with a total value of €5.3 billion. Project Aurora, a €1.9-billion portfolio of business loans was acquired by CRC, AnaCap Financial, and the EBRD, while an agreement for the sale of 51% of the Junior and Mezzanine tranches of Project Cosmos valued at €3.41 billion was concluded with Davidson Kempner.

Attica Bank has agreed to a roadmap with the HFSF and its major shareholders Ellington and the Engineers’ Pension Fund leading up to HFSF’s divestment from the non-systemic lender after at least one more cash injection.

Stock Market

The ASE general index was down -1.24% on a weekly basis, closing at 887.50. Large caps lost -1.52% and banking stocks slid by -3%.

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