GIG Economic Bulletin – September 14, 2020

Defence spending grabbed the headlines on Prime Minister Mitsotakis’ Thessaloniki Expo speech, but a major package of energy transition investments is already on the way, as well as plans to rollout 5G and funding innovation.

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While Greek Prime Minister Kyriakos Mitsotakis leveraged the Thessaloniki Expo Speech to announce his administration’s economic policy for the coming year, a commitment to increase defence spending gained the limelight. Auctioned one-year T-bills yield a zero-interest rate for the first time ever, seven Greek islands are removed from the UK’s “safe corridors” list, while Greece’s Energy Minister Kostis Hatzidakis outlines the blueprint for Greece’s transition away from coal in Western Macedonia and Megalopolis.

Economic policy

Greek Prime Minister Kyriakos Mitsotakis gave the traditional keynote address at the Thessaloniki Expo Forum, outlining his government’s economic programme for the coming year. Among the measures designed to bolster employment, liquidity, and incomes are cuts to employer and employee contributions, the extension of emergency employment support into 2021, a series of tax deferrals for businesses and individuals hit by the pandemic, and the introduction of a 200% depreciation on green and digital investments.

The prime minister also announced a series of reforms including a pensions shake-up, a new insolvency regime, labour reforms, and an extension of e-governance through more digital services.

An increase in defence spending is also on the way, with the purchase of air, sea, and land defence equipment, in addition to the revival of Greece’s defence industry.


Greece’s trade deficit shrunk by -17.1% Y-o-Y in July, following a -10.3% decline in June according to figures from the Hellenic Statistical Authority (ELSTAT). Imports for the month came to €4.46 billion, down -12.7% Y-o-Y, while exports totalled €2.88 billion, marking a drop of -10.1% on July last year. Exports, excluding petroleum products, recorded an increase of 9.2% Y-o-Y.

Unemployment rose to 18.3% in June from 17.3% in May on a seasonally-adjusted basis. Employment increased by 11,640 people in June, but the number of unemployed increased by 58,146. A total of 183,000 jobs were lost since the start of pandemic measures in March, when the unemployment rate was 14.4%.

The Industrial Production Index fell by 0.2% Y-o-Y in July, driven mainly by a 1.7% decrease in the electricity supply index. In the first seven months of 2020, the index fell by 3.8% compared to the same period last year, with the biggest decreases recorded in electricity supply along with mining and quarrying.


An auction of one-year T-bills for the first time yielded a zero-interest rate, after June’s auction achieved a rate of 0.25%. The result has been greeted as a strong vote of confidence by investors in the Greek economy.


At the start of last week the UK removed seven Greek islands from its “safe corridors” list, leading travel companies Jet2 and TUI to cancel upcoming packages until the end of September. On Tuesday the Netherlands placed the islands on its “orange list”, cautioning its citizens against “non-essential” travel to these destinations and requiring travellers to quarantine upon their return.


Energy Minister Kostis Hatzidakis unveiled the master plan for the “just transition” away from coal in Western Macedonia and Megalopolis – the sites of PPC’s coal-burning power stations, which are being phased out as part of the National Energy and Climate Change strategy. The minister listed 16 key projects which include investments in photovoltaic parks, green hydrogen production, energy storage, waste processing and healthcare, and which are expected to create more jobs than the lignite industry. Up to €5.5 billion of national and EU funds have been earmarked to support the projects.

Hellenic Petroleum is due to start construction at the end of September of a 204-MW mega-PV park in Kozani. The €130-million investment is part of the “just transition” plan for the region; it will create 350 jobs and will exclusively rely on domestic suppliers.

George Alexopoulos, the General Manager of Group Strategic Planning and New Activities of Hellenic Petroleum, and Executive Member of the Board of Directors, highlights “the project, with a total installed capacity of 204 MW, will be the largest RES plant in Greece and one of the five largest photovoltaic plants in Europe.” Copyright: Diyana Dimitrova / Shutterstock

A 250-MW energy storage facility is in the works for Western Macedonia as part of the European ENTSO-E 10-year plan. The facility proposed by Greek company Eunice will use 75 clusters of lithium-ion batteries to store electricity from renewable sources during off-peak times, and will allow a greater use of renewable-based energy.

DEPA Markets is adopting a three-pronged business plan for investing in small scale LNG. The plan revolves around the promotion of LNG in shipping, LNG bunkering for large business consumers and remote areas, and LNG truck loading in partnership with DESFA, which is due to complete its loading station at the Revithoussa terminal in December 2021.

Gas networks company DESFA will become the fifth partner in the Alexandroupoli FSRU, according to Energy Minister Kostis Hatzidakis. At least 12 traders have expressed an interest in reserving capacity at the LNG facility, which will become operational by the beginning of 2023.


Greece is preparing to launch the auction for 5G licenses in the coming weeks, with likely bidders including COSMOTE, Vodafone, and Wind. The government will utilise 25% of the license revenues to seed a venture capital fund dubbed the Phaistos Fund that will invest in companies developing 5G services. The starting capital of the fund is estimated at €80-€100 million.

Stock market

The ASE general index fell by -0.51% on the week ending September 11, closing at 636.03 points after another week marked by low trading activity and no distinct trends.

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