GIG Economic Bulletin – December 28, 2020

While the economy continues to count the cost of the pandemic, infrastructure investments, market reforms, and the green transition are on the agenda for 2021 as year-end approaches.

United Against Covid-19Economic Bulletin
While the effects of the coronavirus pandemic on the Greek economy continue to unfold, the deployment of a vaccine coupled with ambitious investment plans for 2021 are creating optimism for a swift economic comeback. Meanwhile, plans for the creation of a “bad bank” are gaining traction, Greece’s Piraeus Port has maintained its position as the leading container port in the Mediterranean, and the country’s green transition is set to be centre stage in the coming year.

Agenda 2021

The government’s strategic investment plans for 2021 include national highways, the extension of the Athens Metro, the electricity interconnection of the Aegean islands, and the building of new correctional facilities in Athens and Crete. Investments will be accompanied by reforms to the electricity market, public-private sector partnerships, and improvements to the ease of doing business, according to the plan presented at the last cabinet meeting of 2020.


Government measures supported the balance of company registrations during 2020, according to company registry GEMI. New registrations were down by 8.6% on an annual basis, while closures were reduced by 40% compared to 2019. New registrations outnumbered closures by more than 2:1.

However, a survey carried out on behalf of the Professional Chamber of Athens suggests that nearly one in four businesses may not re-open after the lockdown, with the percentage reading 42% and 34%, respectively, in the catering and retail sectors.

Retail turnover was down 8%, or €3 billion, in the first nine months of 2020 compared to the same period in 2019, according to the Hellenic Statistical Authority (ELSTAT). The losses were greatest in the sales of jewellery, cosmetics, and clothing. While the winners were fewer, they included electronics and pharmaceuticals, while online sales were up almost 15%.


Hercules II, the second round of state-backed NPL securitisations, is set to run until December 2022, offering €12 billion of guarantees. The first round of guarantees has already been used up after NBG approved the securitisation of the €6.1-billion Frontier portfolio.

Piraeus Bank is close to a deal with strategic partner Intrum for the securitisation of project Phoenix, which consists of €1.9 billion of mortgages. The bank’s project Vega, which is made up of €1 billion in mortgages and €4 billion in business loans, is expected to be completed in Q1 2021. Both projects will be using state guarantees from the Hercules asset protection scheme.

Plans to create a “bad bank” to absorb up to €40 billion of troubled assets from the systemic banks continue to gain traction. The scheme would supplement Hercules as a solution for NPEs, along the lines followed by Ireland and Spain.


With three coal-fired power stations due to close in 2021 and close to €9 billion of green energy investments in the pipeline, the coming year is shaping up to mark a crucial turning point in Greece’s energy transition. The government has unveiled plans to invest €107 million in transitional spending targeting job creation and reskilling initiatives to aid coal-producing areas reach the next stage.

Real Estate

The pandemic and the resulting absence of foreign investors has put the brakes on the property market. Bank of Greece figures show inflows from abroad at just €593 million during 2020, compared to €1.45 billion in the same period last year, a drop of over 40%. The issuance of Golden Visas linked to property purchases also fell, with estimates pointing to 2020 generating just 20% of the 3,428 visas issued in 2019.

Data centres, smart offices, logistics, and luxury resorts are among the types of real estate that are expected to continue to attract interest in the coming months, according to property experts at the 22nd Capital Link conference.


The tourism sector lost close to 80% of its revenues due to the pandemic in 2020. While the rollout of vaccines is generating some optimism, the industry expects the 2021 season to kick off later than usual in June, and to bring in no more than 50% of 2019 visitors and revenues – 15 million visitors, and around €9 billion travel receipts. This is in part because airlines expect that in the best-case scenario they will be able to offer no more than 60% of their 2019 capacity.


The Port of Piraeus held on to its position as the largest container port in the Mediterranean, having moved 3.7 million TEUs in the first three months of 2020. The PortEconomics rankings place Piraeus 4th in Europe and 26th globally, despite an annual fall in traffic of 5.5%.

Port of Piraeus Copyright: Aerial-motion / Shutterstock

Stock Market

The ASE general index closed the week down by -1.58% at 787.48 points, with low volumes and nervousness over the new strains of Covid-19 and Brexit dominating the week’s trading. However, the markets held on to most of December’s gains, with month-to-date performance of 6.86% with four trading days to go until year end.

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