The European Commission has approved an 800 million euro scheme by Greece, designed to support tourism companies which have been heavily affected by the COVID-19 outbreak, Reuters reported. "They (the companies) have been hit hard by the pandemic, and this scheme will help ensure the continuity of their economic activity in these difficult times," Commissioner Margrethe Vestager, who is in charge of the European Union's competition policy, said in a statement on Tuesday.
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Greece has reopened to many overseas visitors, including from the U.S., jumping ahead of most of its European neighbors in restarting tourism, even as the country’s hospitals remain full and more than three-quarters of Greeks are still unvaccinated, the New York Times reported. It’s a big bet, but given the importance of tourism to the Greek economy — the sector accounts for one quarter of the country’s work force and more than 20 percent of gross domestic product — the country’s leaders are eager to roll out the welcome mat. And although the U.S.
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Greece says its tourism services will open on May 15 when a ban on travel between different regions of the country will also be lifted, the Associated Press reported. Prime Minister Kyriakos Mitsotakis made the announcement in a televised address Wednesday, adding that restaurants and cafes will be allowed to reopen outdoor areas starting on May 3. Restrictions, many of which have been in effect since early November, will remain in place over Orthodox Easter on May 2. “Our goal is to have a safe Easter and a free summer. But one cannot undermine the other,” Mitsotakis said.
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Greece attracted bumper demand in its first sale of 30-year bonds since 2008, completing the country’s full return to debt markets, Bloomberg News reported. The nation drew in more than 26 billion euros ($31 billion) of orders for its 2.5 billion-euro sale via banks. That showed investors’ long-term confidence and appetite for a yield at nearly 2% that is the highest in the euro area. The demand, just shy of a record set earlier this year, allowed Greece to cut pricing by 10 basis points from initial guidance.
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Greek banks, among Europe’s weakest, are getting rid of their bad loans at a healthy clip. In spring, the pandemic interrupted plans among the country’s banks to shed loans still festering from the eurozone crisis a decade ago, The Wall Street Journal reported. But stimulus from central banks and governments globally has sent fresh cash into funds that buy non-performing loans, reinvigorating the efforts.
The Greek government's opposition is trying to block new insolvency legislation that it argues would leave vulnerable mortgage holders more exposed to repossession during the pandemic, Yahoo! Finance reported. The conservative government is overhauling its bankruptcy regulations, replacing a protection program for distressed loans on primary homes, which expired in July, with a state subsidy program. The government says the proposed changes would be better targeted and would ease pressure on banks still coping with a mountain of loans left unpaid during years of financial crisis.
Greece is the most vulnerable country in the Eurozone to a shock to tourism says DBRS Morningstar, Capital reported. According to the latest forecasts by DBRS, the recession in Greece this year will reach 7%, while the recovery in 2021 is expected to reach 4%. According to the DBRS’ adverse scenario, the contraction of the Greek GDP this year will come to 9% and growth in 2021 will move at a subdued rate of 1.5%.
Greece’s conservative government has drafted a bill which overhauls its insolvency code, seeking to help over-indebted households and businesses make a fresh start after a crippling decade-long debt crisis, Reuters reported. More than 1 million individuals and 300,000 businesses owe money to banks and the state, legacy of a decade-long financial crisis that shrank the country’s economy by a quarter.
Greece’s National Bank (NBG) has hired Morgan Stanley as an adviser ahead of a planned sale of more than 6.0 billion euros ($6.73 billion) of non-performing credit, part of its balance sheet clean-up efforts, bankers close to the transaction said on Tuesday, Reuters reported. NBG, Greece’s second-largest lender by assets, is aiming to begin talks with potential investors about offloading a portfolio of soured loans known as project Frontier in the second half of the year, they added.
The economic pain for Greece may be similar to other southern European nations. The European Commission forecasts that Greek national income will shrink by 9.7% this year, compared with 9.5% in Italy and 9.4% in Spain, Bloomberg News reported in a commentary. The country is, however, expected to rebound more sharply in 2021, by 7.9%, compared with an expectation of 6.5% growth for Italy and 7% for Spain. Greece’s initial contraction — set to be the largest in the EU — is happening because the economy relies heavily on tourism. As foreigners stay at home, hotels and restaurants suffer.