GIG Economic Bulletin – May 31, 2021

A major milestone in Greece’s energy transformation was hit with the completion of the Crete-Peloponnese electricity interconnector which will slash the island’s carbon footprint, while the launch of the EU Digital Covid Certificate was hailed as a key development in opening up tourism.

Economic BulletinInsights
IPTO, Greece’s power transmission operator, has reached a historic achievement with the completion of the Crete-Peloponnese grid interconnection, which will cover one third of the island’s power demand. Ratings agency Moody’s gives an A rating to Greece’s debt management strategy and the liquidity of the Greek state, while another step is taken towards the completion of the Hellinikon privatisation.


The Bank of Greece expects that out of the €22.5 billion in deposits which accumulated during the pandemic, €7-8 billion will flow back into the economy, delivering a boost equal to 2-4 percentage points of growth over the next two years.

Seasonally adjusted unemployment fell to 15.9% in February from a revised 16.1% in January, according to the Hellenic Statistical Authority (ELSTAT). The number of those employed decreased by 188,706, a drop of 4.8% from the same month in 2020. Total employment stands at 3.7 million people.

Economic sentiment rose to 108.6 points in May, an increase of 10.7 points, according to European Commission figures. The EU average economic sentiment stood at 113.9 points in May, 5.2 points up on April’s reading.

Industry confidence shot up 12.9 point to land at 7.1 points, turning positive for the first time in months and reaching its highest level since April 2007, when it stood at 9.1 points.

Ratings agency Moody’s has rated Greece’s debt management strategy and the liquidity of the Greek state as ‘A’ in its annual credit scoring, thanks to its very high cash reserves, the long maturity of its debt, and its inclusion in the ECB’s PEPP scheme.

Real Estate

Banks and servicers are focussing on auctioning off apartments in the €80,000-€100,000 price range when auctions resume in June. Up to 100,000 properties are expected to go under the hammer in the coming years and will exert some downward pressure on market prices. Market participants estimate that there is currently a gap of roughly 25% between advertised prices and what buyers are willing to pay.

View of Athens from Ymittos Mountain. Copyright: Andronos Haris /


Transmission network manager IPTO announced the completion of the Crete-Peloponnese electrical interconnection, the longest of its kind globally with a length of 174 km. The 150kV AC interconnection will undergo a trial operation in the coming weeks. When fully operational in 2023, it will cover one third of the island’s electricity demand, allowing for the withdrawal of all of its C02-emitting power plants.


The agreement for the transfer of assets for the site of the Hellinikon redevelopment was ratified by Parliament. The agreement will allow privatisation agency HRADF to complete the transfer in exchange for €911 million.


The launch of the EU Digital Covid Certificate took place in Athens, which will come into force across the EU on July 1. Prime Minister Kyriakos Mitsotakis, who was one of the programme’s originators, described it as a “fast lane,” facilitating travel over the summer.


After announcing its share capital increase, Alpha Bank unveiled its new business plan code-named Project Tomorrow. The plan targets a 24% market of credit expansion up to 2024, including €5 billion of business loans and €3 billion of loans to households. It also intends to reduce NPEs by more than €8 billion, with an impact of €1.1 billion in the 2021 fiscal year.

Piraeus Bank reported a loss of €407 million in Q1 2021, largely resulting from impairments due to COVID-19 and loan securitisation losses. The bank reduced its NPEs to €22.1 billion from €22.5 billion at the end of 2020. The Vega and Phoenix securitisations, with a combined gross book value of €7 billion, are expected to be completed in Q2.

Eurobank posted a net income of €70 million in Q1, compared to €57 million in the same quarter last year. The bank’s NPEs edged up by €117 million Q-o-Q to €5.8 billion. Last year’s Cairo securitisation brought the number down from €13 billion in Q1 2020, while the Mexico project scheduled for this year will see the securitisation of a further €3.3 billion.

Stock Market

The ASE general index rebounded with weekly gains of 2.3% to close the week at 887.6 points. Last week’s big loser, Alpha Bank, was this week’s top performer with 19.38% weekly gains, as concerns surrounding its upcoming share capital increase subsided.

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