GIG Economic Bulletin – July 27

Agreement in Brussels on a €1.82-trillion stimulus package could translate into €70 billion euros of recovery funds for Greece. Economic indicators continue to unfold the story of the chilling effect of the pandemic on business activities, however a number of key projects are pressing ahead in energy and logistics.

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Recovery Fund Greece secured around €70 billion in EU funds after marathon negotiations in Brussels over the EU stimulus package. Greece’s share of the €1.82-trillion package consists of €19 billion in grants and €12 billion in low-interest loans from the EU Recovery Fund, in addition to up to €38 billion from the multi-year budget. Prime …

Recovery Fund

Greece secured around €70 billion in EU funds after marathon negotiations in Brussels over the EU stimulus package. Greece’s share of the €1.82-trillion package consists of €19 billion in grants and €12 billion in low-interest loans from the EU Recovery Fund, in addition to up to €38 billion from the multi-year budget. Prime Minister Kyriakos Mitsotakis hailed the outcome as “a historic day for Europe and a great opportunity for Greece”, and described the pot of money available to Athens as “unprecedented”. He said that the goal is to use these funds to overhaul Greece’s production model.


Economic forecasts released in the last week appear to be converging on the size of the hit expected to be borne by the Greek economy as a result of the pandemic. The OECD’s latest forecasts predict the contraction in 2020 to reach -8% in the baseline scenario and -9.8% in the adverse scenario, while the recovery is expected to be in the region of 4.5 in the base case and 2.3% in the more pessimistic case.

Scope ratings gave Greece a BB rating with positive outlook, despite the shock to the economy of the pandemic. According to the German rating agency, Greece has a very favourable long-term debt profile thanks to long maturities and low interest rates agreed with the country’s creditors, while political stability is also a plus. High NPE ratios and structural issues in the economy prevent it from attaining investment grade at present.

Scope anticipates a contraction of -7.8% this year, while Fitch forecasts -8.6%. Capital Economics published a forecast of -8%.


Container movement at the Port of Piraeus’ Piers II and III fell by -6.2% Y-o-Y in the first half of 2020, including a -5.8% drop in May and a -19.5% drop in June. The performance is encouraging in light of the disruption to supply chains and trade routes from China in the first quarter of the year and the global economic standstill that took place in the second quarter.

The Infrastructure and Transport Ministry is putting together an ambitious plan to create an Urban Logistics Gateway in the former industrial district of Elaionas on the western entrance to Athens. The plan also includes the creation of logistics hotels in Piraeus and in three other locations in Athens. The scheme aims to streamline urban freight operations and reduce their environmental footprint. The Athens Urban Logistics Gateway will be created in partnership with the private sector either through a PPP arrangement or a concession.


Travel receipts evaporated in May, falling from €1.56 billion last year to just €13 million this year according to the latest Bank of Greece figures – resulting in a drop of -99%. The transport balance dropped by -21%. The overall current account balance registered a deficit of €914 million compared to a surplus of €270 million last year.

Flagship carrier AEGEAN Airlines recorded monthly losses of €26-28 million in the second quarter of the year, while the cash burn was below the anticipated figure of €40 million. At the end of June, the airline was sitting on cash reserves of €400 million, in addition to a €120-million credit line from the banks and €150 million from the COVID-19 guarantee fund. However the company’s management is bracing for the toughest year in the airline’s history as a result of the pandemic.


Retail sales fell by -23% in the first half of 2020, with profits down -77% over the same period. A survey by the Greek retailers’ association SELPE showed nine in ten households see the crisis lasting until the end of 2021.


Industrial turnover fell by -30.4% Y-o-Y in May, compared to a drop of -35.4% in April this year according to the Hellenic Statistical Authority (ELSTAT). Manufacturing led with a -30.5% drop, followed by mining and quarrying to the tune of -23.5%.

The Purchasing Managers Index (PMI) rose in May to 49.4 points from 41.1 points. The figures indicate a slowing down in the deterioration across the sector, accompanied by a slower fall in production.


Leading industrial conglomerate MYTILINEOS Group secured €125 million in credit from the EIB for the construction of a 826-MW power plant at Agios Nikolaos in Boeotia. With a cost of €322 million, the generator will form part of Greece’s national strategy to diversify power generation and phase out lignite by 2023.

“The importance and vision of the Agios Nikolaos power plant to contribute to a cleaner energy future for Greece has been recognised by EIB’s first ever loan to Mytilineos. The new long-term EIB loan, shows how the EU Bank supports transformational investment in this country.” Evangelos Mytilineos, Chairman and CEO of Mytilineos SA. Copyright: MYTILINEOS

Natural gas supplier DEPA is preparing to launch a tender for the construction of the first LNG bunkering vessel in Greece and the eastern Mediterranean, to be based at the LNG terminal at Revithoussa. DEPA has secured €20 million in funding from the EIB and an €8.9 million grant from The EU as part of the BlueHubs programme.

Meanwhile, bunkering service provider Titan LNG has secured €11 million from the EU’s Connecting Europe Facility towards its Bio2Bunker Bio-LNG shipping project.


In its latest economic survey of Greece, the OECD comes out in favour of a “bad bank” as a solution to both the NPE burden on Greek banks, and the Deferred Tax Credit, which is emerging as a barrier to reducing NPEs through sales of troubled assets.

Stock market

The ASE general index closed the week down -1.11% at 634.3 points, while the banking sector registered losses of -1.2%, as geopolitical tensions with Turkey in the eastern Mediterranean brought an injection of volatility.

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