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Economy

COVID-19 Crashed Greek Economy in 2020, Down 8.2%, Resilience Seen

ATHENS – It was less than expected given three lockdowns that spilled over into 2021 but Greece’s wracked economy plummeted 8.2 percent during the COVID-19 pandemic in 2020.

The last quarter, when the third shutdown of non-essential businesses began on Nov. 7, fell 7.9 percent and by the first week of March the effects were still being shown, most places closed half the previous year.

Restaurants, bars and taverns were especially hit and many may never recover nor reopen when the lockdown lifts and if the pandemic ends as a vaccination program is still slowly unwinding far behind schedule.

For all that, the downturn was less than the 10 percent or more than had been expected, the New Democracy government in 2020 pouring 17.5 billion euros ($20.77 billion) into subsidizing salaries of laid-off workers and propping up their beleaguered companies.

The European Union also provided 32 billion euros ($37.98 billion) in loans and grants but it wasn’t reported how that was being spent or used as the Finance Ministry said state coffers were running dry without companies or workers paying in taxes or buying taxed goods.

Still, the economy is among the worst hit in the European Union after the pandemic hit just as a slow recovery from a near decade-long crisis worsened by austerity measures as part of 326 billion euros ($386.97 billion) in three international bailouts that ended Aug. 20, 2018 was speeding up.

Greece's Gross Domestic Product (GDP) in 2020 fell to 168.5 billion euros ($200.01 billion) which was  down from 183.6 billion euros ($217.94 billion) in 2019 when the country was riding another record tourism year.

The figures came from the Hellenic Statistical Authority (ELSTAT) which said the 8.2 percent drop was far less than a government estimate of 10.5 percent that had been factored into the 2021 budgets, the EU expecting 10 percent.

Analysts said that the government’s support measures played a key role in damage control: “The fiscal intervention has been effective, especially in the employment domain,” The National Bank’s Chief Economist Nikos Magginas told Kathimerini.

“The figures show that healthy enterprises continued their investments and public investment supported investment activity,” explained Magginas, the government reaching out for foreign investors to spur a recovery again.

Prime Minister Kyriakos Mitsotakis said that “ Despite the great dependence on tourism, the GDP data show that the Greek economy demonstrated greater resilience than many people had thought in 2020.”

Finance Minister Christos Staikouras said the economy had somehow managed to withstand the pandemic’s brutal blow although unemployment has surged and it’s uncertain how many will be left jobless.

He noted that, although the data are provisional, they “confirm the correctness of the economic policy exercised; a policy that includes a broad range of measures for supporting households and corporations, managing to soften the pandemic’s economic blow,” the paper said.

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