GIG Economic Bulletin – March 22, 2021

The hugely successful issue of Greece’s first 30-year bond since the financial crisis underlines the return of investor confidence, while the European Commission’s decision to adopt the Greek proposal for Digital Green Certificates boosts hopes for the recovery of the tourism industry.

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The completion of Greece’s first 30-year bond deal since 2008 has marked the country’s full return to debt markets, while underlining investor confidence in the post-pandemic economy. Greece’s National Recovery Plan is expected to give a 2.1% boost to the economy in 2021 alone, while the tourism industry is responding with optimism to the EU’s decision to move ahead the Greek proposal for Digital Green Certificates.


Unemployment fell to 15.8% in December on a seasonally adjusted basis, from 16.2% in November, according to the latest release from the Hellenic Statistical Authority (ELSTAT). However, ELSTAT cautions that the drop in unemployment is largely due to the increase in the economically inactive population during the pandemic, while the classification of some furloughed staff as employed may mask the true rate.

A series of positive forecasts paint an optimistic picture for post-pandemic Greece. Citi has revised its 2021 forecast from 3.1% growth to 5.5%, and sees cumulative growth of 10% in 2021-2022. Oxford Economics forecasts 2.1% growth this year followed by an impressive 10% recovery in 2022.

Recovery Plan

Greece’s National Recovery Plan presented to the Eurogroup foresees a boost of 2.1% to the economy through €5.5 billion of projects in 2021 alone. Greece’s submission has been described as one of the strongest among member states by European Commission officials.


Greece’s 30-year bond issue was oversubscribed by more than 10 times, with offers exceeding €26 billion and the rate settling at 1.956%. Greece drew €2.5 billion from the issue, which was the longest since January 2007. This latest market foray benefitted from positive sentiment following the ECB announcement regarding increased PEPP purchases.


The European Commission has backed the Greek proposal for Digital Green Certificates, which are expected to facilitate travel across Europe. The decision has been welcomed by Greece and other countries of the European south, seen as a boost for tourism over the coming summer season.

A study by Goldman Sachs predicts that a relaxation of cross-border travel restrictions in Q2 could boost the Greek economy to the tune of 1% of GDP. The adverse scenario where restrictions remain in place could result in a -1.3% contraction over the same period, according to the bank’s modelling.

Bank of America sees Greece benefitting from the return of tourism, despite expectations of subdued traffic from Europe. A report issued by the bank forecasts 45-50% of 2019 income from roughly half the visitors.

Elafonisi Beach, Crete. Copyright: DaLiu /


Greek-owned ships topped 4,000 vessels in 2021, while reaching new capacity highs of 350,465,999 dwt and 205,647,569 gt.

Banks & Servicers

By the end of 2022, Greek lenders are expected to have NPE ratios below 10%, according to speakers at the NPL Summit 2021. Covid loan subsidies, the new insolvency regime with the introduction of the “second chance” principle and Hercules II are all seen as likely to help banks clean up their balance sheets in advance of their 2022 targets.

Piraeus Bank is aiming for a €1 billion share capital increase in April, in addition to the issue of a €600 million Tier II bond to absorb the losses from the planned €11-billion securitisation codenamed Sunrise. The moves are part of the bank’s clean-up strategy that will bring the stake owned by the Greek state through the HFSF down to 33.3% and continue to reduce the bank’s NPE ratio.

Loans managed by credit servicers rose by 19% Q-o-Q to €38 billion, according to a quarterly report published by the Bank of Greece (BoG). Just under half the loans are owed by individuals and private not-for-profit institutions, 36% relate to corporations, and 15% to sole proprietors.

Covid-19 Measures

Encouraged by the Eurogroup decision in favour of extending the escape clause from fiscal discipline into 2022, the government is beginning to design the next round of support measures for the economy. Under consideration are an extension of existing measures such as tax advance refunds and furlough schemes, and lower social insurance contribution rates.

The government announced the launch of a free Covid-19 mass testing programme to accompany the gradual reopening of services and retail in the coming weeks.

Stock Market

The ASE general index closed the week down -1.97% at 833.07 points, with bank stocks recording the largest losses.

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