Greece starts recovery plan, pays initial costs itself

Moving forward: A recipient of the Pfizer-BioNTech vaccine against Covid-19 in Greece. The country is looking at a successful vaccination programme as one of the drivers for growth. — AP

ATHENS: Greece is moving ahead with its programme to recover from the economic fallout of the pandemic even before initial funding arrives from the European Union (EU), according to Finance Minister Christos Staikouras.

“We are among the first countries to submit our programme and we’ve already started to implement some of the reforms and investments, ” Staikouras said in an interview.

The government of Prime Minister Kyriakos Mitsotakis is ready to start labour market reforms, while projects such as providing tablets and laptops to students are already up and running. Rather than waiting for the initial disbursement of EU funds expected by the end of the summer, Greece is “covering initial costs with our own resources, ” Staikouras said.

For Greece, there is a lot at stake. The government is betting its recovery plan will help the country overcome “the large investment gap observed during the financial crisis years, which deteriorated further during the pandemic, ” the minister said.

Greece’s economy shrank 8.2% in 2020 under the weight of the pandemic, coming in the wake of the country’s mammoth 25% contraction over the last decade as a result of its debt crisis.

Mitsotakis’s government forecasts 3.6% growth this year and 6.2% in 2022, as help comes in the form of the European funds and supportive fiscal policy for next year.

Athens is also looking to the continuation of the European Central Bank’s pandemic emergency purchase programme, known as PEPP, and a successful vaccination programme as drivers for growth.

The goal is to reinvent the country by building a more outward-looking, resilient, inclusive, digital and green economy, the minister said. Once normal conditions have been reestablished, “our intention is to continue a prudent, balanced and sound fiscal policy, which includes permanent reductions in taxes and social insurance contributions, ” Staikouras said. — Bloomberg

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