Economic bulletin – May 25

With lockdown easing further, the Greek government launched the second phase of its economic support plan and marked the calendar for the reopening of tourism.

United Against Covid-19Economic BulletinInsights
Greece announces its economic recovery plan, with support measures totalling €24 billion since the onset of the coronavirus pandemic, while the country is set to begin welcoming international travellers, based on the epidemiological profile of their country of origin, as early as May 25. The European Commission’s sixth post-programme review on Greece gives overall positives nod, while a Franco-German proposal for a €500-billion EU Recovery Fund could entail €8-10 billion in funding for the country.

Lockdown easing

Hairdressers did bumper business in May, with electronic transactions up 125% YoY before the month was even over, as Greeks begun to return to a semblance of normal life. Most retail businesses experienced a boost in electronic receipts in May, in some cases more than compensating for losses in April.

On Monday, May 25, restaurants, bars and cafés are re-opening albeit with limited capacity, while restrictions on travel to the islands have been lifted.

Recovery plan

The government this week set out its plan to soften the impact of the pandemic on the economy and set Greece on track for recovery. The economic support measures total €24 billion in value since the start of the pandemic, and include employment support, tax relief, and incentives to boost entrepreneurship. Launching the plan, Prime Minister Kyriakos Mitsotakis described it as a bridge, offering “a transition from the uncertainty of today to the security of tomorrow.”

Among the key points of the recovery plan are

  • An employment support scheme dubbed “SYN-ERGASIA;”
  • VAT on restaurants, travel, cinema tickets, and goods including soft drinks reduced from 24% to 13%;
  • Tax pre-payment refunds to businesses worth €2 billion;
  • State-backed business loans totalling €7 billion euros.


Tourism Minister Harry Theoharis launched the government’s “Restart Tourism” plan, with a roadmap for re-opening hospitality businesses and international travel routes. The milestones in the plan include:

  • Arrivals by private yacht or sailboat (including charters) to be allowed from May 25;
  • Year-round hotels and campsites to reopen June 1;
  • Summer season hotels to reopen June 15;
  • International flights to Athens International Airport to resume from June 15;
  • International flights to regional airports to resume from July 1.

Initially Greece will welcome travellers based on the epidemiological profile of their home country. International arrivals will not have to demonstrate a COVID-negative status or be tested on arrival, but will be expected to submit to spot testing on the Greek authorities’ request.

Hygiene protocols for hospitality businesses were published this week, including the requirement for hotels to have access to a dedicated doctor with special training in handling potential COVID-19 cases; staff to be trained in enhanced cleaning procedures; and a requirement for larger hotels to have a documented action plan in case of infection. Rules are laid out for distancing and disinfection routines, and there is the potential to introduce a pandemic compliance certificate for tourist lodgings.

On Tuesday, Prime Minister Mitsotakis and his team took part in a virtual summit with the leaders of Bulgaria, Romania and Serbia. Greece’s Balkan neighbours are likely to be among the first to agree to mutual terms for opening borders to tourism and goods traffic.

Cyprus has listed Greece among its “Category A” countries for the purpose of travel, which will not require testing of travellers from June 20.


The release of official figures is beginning to paint a picture of the impact of the pandemic and the lockdown on the economy.

Greece saw tourism intakes evaporate in March, with foreign arrivals down by -47% compared to the previous year, and travel receipts down -71% YoY, according to Bank of Greece figures.

Industrial turnover fell by -9.3% YoY in March, following a -2.4% decline in February.

Enhanced Surveillance Review

The European Commission released its sixth post-programme review on Greece, with an overall positive assessment, taking into account the impact of the pandemic on delivering some targets. The report endorsed the disbursement of a €748-million tranche of profits from the SMP and ANFA bond purchasing schemes, which constitute proceeds derived from Greek bonds by eurozone member-states’ central banks. The funds are to be used for funding needs related to the pandemic.

EU Recovery fund

Athens drew some encouragement from the Franco-German proposal for a €500-billion EU Recovery Fund based on mutualised debt and grants. Greece hopes to secure around €8-10 billion in total from the fund, which would equate to an annual 1.5-2% boost to GDP over the next three years.

The official proposal is due to be presented on May 27.

German chancellor Angela Merkel and French president Emmanuel Macron proposed a recovery fund of €500 billion to support the most affected sectors and regions in the EU by the coronavirus crisis. Merkel highlights “the goal is for Europe to emerge from the crisis stronger.” Copyright: photocosmos1 /

Debt issuance

The government plans to draw €9.5 billion from the markets to cover budget losses from pandemic support measures and help restart the economy. Its debt issuance plan includes raising €4.5 billion through new bond issues, and €5 billion from T-Bills over and above the initial debt strategy, with the first market foray planned for the end of May or early June. Together with €1.3 billion in SMP and ANFA profits, €1.4-2.5 billion from the SURE programme, and €3 billion from the EIB loan scheme, this totals an estimated €15 billion in pandemic support funds.


Greek banks are preparing for a series of virtual roadshows starting in June with events organised by Wood and Goldman Sachs, with the agenda expected to focus on dealing with bad loans.

Thanks to grace periods granted to borrowers, the banks do not expect to book any more bad loans in 2020, while the target of dropping the NPE ratio below 20% by 2021 through large securitisations has been deferred. However, some deals such as Eurobank’s Cairo securitisation could still go ahead within the quarter.


Aegean Airlines will be restarting its international routes in July, aiming to reach 25% of its operations in the middle of the summer, and rising to 45-50% by September. The company lost 59% of its revenues in March racking up losses of €44 million due to the pandemic, and has placed 70% of its staff on the government’s emergency support package. The government is working on a special support package for the airline along with other companies of strategic importance, to enable it to compete in the regional market.


A further milestone in the Hellinikon project was completed with the inking of the deal between Hellinikon S.A. and Lamda Development. This means that preparatory work on the site, including the demolition of several buildings, could start as early as June.

Stock market

The ASE General Index ended the week up 2.68%, closing at 609.2 points on Friday. There was a lot of volatility in the banking sector thanks to the rebalancing of the MSCI index, however by the end of the week the sell-off had abated, and the banking sub-index clawed back its losses to gain 1.9% in Friday’s trading.

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