GIG Economic Bulletin – February 15, 2021

The EU Recovery & Resilience fund could bring investments approaching 3.3% of GDP in 2021, according to Bank of Greece governor, while the Finance Ministry looks to juggle short-term support measures in response to the latest Covid-19 lockdown.

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A final decision by Greece’s gaming regulator has awarded the Hellinikon Casino license to the Mohegan-GEK Terna consortium, paving the way for a landmark €950 million investment at the site of the former Athens airport. Fraport Greece has completed its €440 million refurbishment of 14 regional airports, three months ahead of schedule, while leading power company PPC has approved a €1 billion joint venture with RWE Renewables for the development of up to 2GW of photovoltaics.


The European Commission’s winter forecasts show that Greece suffered the second deepest recession in the EU, coming behind Spain, with the economy shrinking -10%. The Commission predicts Greece’s GDP will only grow 3.5% in 2021, due to its forecast for a limited recovery of tourism this year, followed by 5% growth in 2022.

Morgan Stanley believes that the pandemic’s impact on Greece will be serious but manageable, with the country’s GDP growth in 2024 coming in just 1.5% lower than its initial pre-Covid path, compared to the gap of 19.8% during the 2015 eurozone crisis.

Industrial production edged up by 3.3% Y-o-Y in December on the Hellenic Statistical Authority’s (ELSTAT) index, following an 8.9% rise in November. The rise was driven mainly by electricity supply (17.6%), while manufacturing rose negligibly (0.03%) and mining and quarrying decreased by -8.4%. For the whole of 2020, the industrial production index fell -2.1%.

According to ELSTAT’s latest figures, unemployment fell to 16.2% in November on a seasonally adjusted basis. While the number of unemployed decreased by 15,849 from the previous month, the number of economically inactive people increased by 37,944 due to the pandemic.

Construction activity slowed down further, as reflected by a -12.4% Y-o-Y drop in new building permits recorded in November, on the heels of a -4.9% decrease in October, according to the latest release from ELSTAT. Increases were recorded in Attica, the Peloponnese, and western Macedonia; however, the absolute number remains low, at 1,585 nationwide.

IMF Prepayment

The process has been initiated for Greece to prepay €3.1 billion in loans back to the IMF, covering the schedule for the rest of 2021. Greece requires approval from the ESM for the move, which is aimed at reducing the country’s borrowing costs.

Covid-19 Measures

The Finance Ministry announced an additional €1.5 billion of Covid support for businesses in the form of tax advance refunds covering Q1 2021, taking the support bill for the first quarter of 2021 to €5.9 billion out of the €7.5 billion allocated in the budget. VAT cuts were also announced for cafes, alcoholic beverages, and the tourism sector up to the end of the year, with more expected after the announcement of the latest lockdown.

The cost of the three-week strict lockdown imposed on Attica is estimated to reach €2.7 billion according to Finance Minister Christos Staikouras, taking the total support bill for 2021 as high as €11 billion.

Recovery Plan

The EU Recovery and Resilience fund is expected to finance €5.5 billion of investments this coming year, equivalent to 3.3% of GDP, according to Bank of Greece governor Yiannis Stournaras. Stournaras told an ECB-organised virtual round table that Greek banks should use their experience derived from the financial crisis to anticipate and manage the risk of a new generation of bad loans arising from the pandemic.


Greece’s gaming regulator has reached a final decision to award the Hellinikon Casino license to the Mohegan-GEK Terna Consortium. The consortium will be paying €150 million for the license, which will allow it to proceed with plans to invest €950 million in building the first integrated resort casino in Greece on the site of the former Athens airport.

Inspire Athens in Hellinikon will be the first Integrated Resort and Casino in Greece. Copyright: Mohegan Gaming

Privatisation agency HRADF is expected to announce at the end of February the final list of bidders for the final phase of the tenders for the ports of Alexandroupli and Kavala. The tenders include 67% ownership of the Port of Alexandroupoli and the concession on Kavala Port.

Fraport Greece has managed to complete its €440 million revamp of 14 regional airports, three months ahead of schedule. The investment programme included five new terminals, five extensions to existing terminals, and upgrades to four terminals and 12 runways.


Piraeus Bank is bringing forward its share increase by one month to March, with the aim of completing the process before the upcoming stress tests in July. The HFSF, which currently holds 61.3% of the bank’s share capital on behalf of the Greek state, would see its share drop below 30% after the planned €1-billion increase; it is yet to decide whether to participate.

Alpha Bank is preparing a series of bond issues, starting with €500 million of Tier II debt, followed by €500 million of senior preferred titles. NBG and Eurobank are planning similar moves. The bond issues are designed to meet capital requirements under MREL, and will enable the banks to proceed with their NPL reduction strategies over the coming year.


Public Power Corporation (PPC) has approved a €1 billion joint venture with RWE Renewables which aims to install up to 2GW of photovoltaics over a 3 to 5-year period. The targets are expected to be met in part by major PV parks planned for western Macedonia and Megalopoli in the Peloponnese in the place of the existing coal power stations.

Stock Market

The ASE general index closed the week with gains of 1.5% at 776.09 points. The FTSE25 gained 1.5%, while the banking sector was down -0.96% for the week.

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