Greek Business File, June-July-August 2020, No 126

By Kyra Adam


Is Greece the modern Sisyphus? The country survived a tremendous 10-year economic crisis. The country absorbed at her detriment a refugee crisis, literally saving Europe.

The country successfully handled the recent health crisis caused by Covid-19. By March 2020, Greece was reaching the top of the hill, facing the beginning of an economic recovery.

Two months later, the country is again at the bottom of the hill carrying a huge boulder in hands: frightening recession, severe unemployment, public debt and non-performing private debt rising again. On top of this, there is no room for fi scal derailment in favor of substantive economic “help” to various companies and their employees.

The tourism sector has been Greece’s economic life vest, her own “heavy industry”, reducing the effects of the 10-year crisis. Probably, no more. The Greek government has already initiated the new campaign “Come to Greece” for safe vacations, deliberately diminishing the threat of another wave the virus, in the Greek islands, putting their fragile health infrastructures to the test.

The truth is that Greek tourism –a small portion of the worldwide tourism sector that will be deeply wounded by Covid-19– cannot save the domestic economy, neither on the short nor on the long run. Once again, the poor performance of all Greek governments and political parties on restructuring the Greek economy during the crisis years has come to the surface. The current crisis offers –in a much more complicated, dazed and confused, hardly competitive world economic environment– the difficult challenge for Greek economy to break up with the past and secure new, solid foundations for its economy.

Keeping in mind that almost two generation of young Greeks –the so-called millennials– are the true victims of the past and present economic crisis, all dazed and confused not only about their near future but also about the outcropping policies, implemented for more than a decade.

This extremely diffi cult situation Greece faces, is probably the reason for recent suggestions that come from Greek business circles in favor of a coalition government for the next period.

Meanwhile, the Greek government has high expectations –that one may call “wishful thinking”– from the “EU economic response to the Corona Crisis”. Many documents claim that, within the limits of its powers, the EU acted swiftly in dealing with the pandemic of Covid-19 and its consequences, having organized a set of measures (some have already been decided, others make suggestions on how to address the crisis), drawing on both the EU budget and a broader economic package.

Recently, Parliament called on the European Commission to propose a €2 trillion recovery package, mainly through grants, instead of loans. The recovery package should provide real funding to help those most affected and focus on climate change mitigation, digitization, and a new health program. The Commission has pledged to propose a comprehensive recovery plan, along with revised proposals for the PDP 2021–2027.

On top of this came the Merkel-Macron proposal for €500 billion euro of non-refundable aid, followed by the strong reaction of “the Frugal Four” (Austria, Denmark, Sweden, and the Netherlands).

Attempting to add up all the amounts will result in a non-existent total: The EU’s economic response to the corona is €3.39 trillion.

No one up to this moment is ready to calculate the amount that will reach our country, thus being futile and without any basis for current discussion. And yet, the basis on which the Greek government must act primarily is to safeguard labor and subsidy any effort to avoid further exacerbation of unemployment.

It would be naive to stick to the one and only argument during this difficult time, the request to the partners to “send tourists to Greece”.