A decade after debt crisis, Greece on verge of virus recession

May 2, 2020 00:00 AM

By Agence France-Presse

Ten years after sinking into its worst economic crisis in living memory, Greece once again faces the spectre of a grave recession in the midst of a global coronavirus lockdown.

When will the tourists return?, worried Greeks ask (AFP / Louisa GOULIAMAKI / MANILA BULLETIN)

Though the country has so far been spared the death toll of other European nations at fewer than 150 fatalities from COVID-19, it will not escape the resulting economic downturn, Prime Minister Kyriakos Mitsotakis warned this week.

"The consequences of this coronavirus attack will undoubtedly be dramatic," he told parliament on Thursday.

"We know with certainty that (the recession) will be deep... we don't know how long the health crisis will last, we don't yet know if we'll have tourism."

Tourism is one of Greece's most important sources of revenue, along with shipping.

The Greek state alone could lose 8-10 billion euros ($8.8-11 billion) in income this year, the prime minister said.

Where's the money? -

Greece has already adopted measures worth 17.5 billion euros, or 10 percent of national output, to support businesses and employees, Mitsotakis said.

Including EU funds, the package will reach 24 billion euros, he said.

AFP / Marco BERTORELLOWhere's the money?

But the opposition has questioned whether the money has actually reached the intended recipients.

"Where is this money? It's good for announcements but actual businesses and (employees) have not received a single euro," former leftist prime minister Alexis Tsipras said Thursday, predicting that layoffs will soon be "out of control".

Greece this year had been counting on a growth spurt of 2.4 percent. After exiting the final debt crisis bailout in 2018, its borrowing rates were at historic lows -- in October Athens even sold treasury bills at a negative rate -- and it has cash reserves of more than 36 billion euros at hand.

But with most of its economy in virus quarantine since March and global lockdowns expected to wreak havoc on tourism, Greece is expected to sink into a 10 percent recession this year, according to the International Monetary Fund.