The expert committee chaired by Nobel laureate economist Sir Chris Pissarides has published its recommendations for the transformation of the Greek economy. The report focuses on ways to increase productivity, grow exports, and improve the links between industry and innovation. The proposals will be put to a broad consultation, and will form the basis of Greece’s submission to the European Commission for the EU Recovery Fund.
Prime Minister Kyriakos Mitsotakis has made a series of targeted changes to his cabinet to focus on the task of applying for and absorbing the EU stimulus package, which totals €32 billion in grants and loans for Greece.
Greece’s Purchasing Managers’ Index (PMI) closed July at 48.6 points, down from 49.4 points at the end of June. Producers recorded weak demand from basic export markets and tourism resulting in a deterioration in manufacturing output.
The Foundation for Economic and Industrial Research (IOBE) index of economic sentiment rose to 90.8 points in July, showing a slight improvement from June’s 87.6 points. Confidence in industry and services improved, while retail and consumer sentiment declined.
Unemployment rose to 17% in May as the lockdown restrictions were lifted, the highest level yet this year. The rise was particularly high in the 15-24 age group where it reached 37.5%. However, 67,900 net new jobs were created in July as tourism began to reopen.
Going into August, Greece has been registering a growing number of new COVID-19 infections, attributed primarily to a number of local super-spreader events and, to a lesser degree, foreign visitors. As of August 9, the country has recorded 5,623 cases since February, 961 in the past week, and 212 deaths in total.
Prime Minister Mitsotakis has called on the public to abide by the government’s COVID-19 measures, including wearing masks and maintaining social distancing.
The U.S. Department of State has issued a Level 3 travel advisory for Greece, advising U.S. citizens to reconsider travel in light of the resurgence of infections.
The government is weighing up further measures, including whether to go ahead with the Thessaloniki International Fair, which is scheduled to open on September 5, featuring Germany as the honoured country.
LNG imports to Greece doubled in the first half of 2020 compared to the same period in 2019, reaching a record of 1.9 billion cubic metres (bcm), and exceeding pipeline gas for the first time according to a report by S&P Global Platts. Over half the LNG imports originated from the U.S., with the balance coming from Qatar, Algeria, and Nigeria.
Greece is launching an €850-million energy efficiency programme with the aim of upgrading the energy performance of 60,000 homes. The programme will also fund smart homes, net metering, energy storage, and electric vehicle charging installations.
Athens International Airport international arrivals were down 76% in July compared to the same month last year, while regional airports also reported drastically reduced traffic with international passenger arrivals down 95.7% in June.
The Hellenic Development Bank has launched two venture capital funds with seed capital totalling €500 million. Greek Green Funds will focus on investments in renewable energy, energy efficiency, and the cyclical economy. The Synependisis-Coinvestment Fund will seek to attract investment in Greek-based SMEs. Both funds will aim to draw private investment into ventures aligned with Greece’s national energy and climate change strategy.
Alpha Bank and Piraeus Bank submitted requests for access to the “Hercules” scheme of state-backed guarantees, and are expected to be joined shortly by National Bank of Greece (NBG). Eurobank was the first to make use of the state guarantees for its Cairo project in June. The banks plan to use the scheme to accelerate their securitisation drive, which was interrupted by the pandemic, in the coming weeks. Piraeus plans to securitise €7 billion worth of loans by the year’s end starting with the €2 billion Phoenix portfolio, while Alpha is about to launch its Project Galaxy portfolios valued at a combined €10.8 billion.
The government is planning to create a Credit Bureau to promote a secondary market in non-performing exposures (NPEs) with an estimated combined value of €100 billion euros. The move is one of a series of measures proposed by the Pissarides report aimed at bolstering the domestic offering in financial products and attracting investors by introducing greater transparency and better regulation.
Piraeus Bank posted pre-tax losses of €215 million in the first half of 2020, compared to pre-tax profits of €57 million over the same period in 2019. Excluding the impact of coronavirus and related provisions pre-tax profits stood at €126 million.
NBG reported a net profit of €465 million euros in the first half of the year, compared to €245 million in the same period of 2019.
The ASE general index gained 2.43% in the week ending Friday, August 7, driven primarily by positive H1 results released by banks and blue-chips including Coca Cola, Titan and OTE.