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Economy

Greece Betting on Big Tourism to Save the Day, Economy Too

ATHENS – Health restrictions and worries about the lingering COVID-19 pandemic set aside, so many tourists are pouring into Greece this summer that the New Democracy government said they are propping up the economy.

Finance Ministry officials hope that there will be so much money that it will fund support measures for households battered by soaring energy and gasoline prices, electric bills and are cutting back on supermarket spending.

The tourism mkoney is going toward helping pay for the cost of electricity for households and businesses, which has nearly doubled, said Kathimerini, leaving money to have to make installment payments.

The General Accounting Office (GAO) said tourism from April to July brought in some 200 million euros ($206.58) but that it was all gone to take care of the state aid for beleaguered households.

The European Union’s Recovery and Resilience Facility also put up as much as 950 million euros ($981.28 million) as well and finance ministry officials are hopeful that the boom month of August will bring in another 300 million euros ($309.88 million) to swell coffers.
There’s so much money – but not enough to reduce a 24 percent Value Added Tax (VAT) on food the government said – that growth this year is expected to be 6 percent, twice as much as first estimated.

But Kathimerini said the government, facing an election period in 2023, is considering sending the most vulnerable households and citizens cost-of-living checks but it wasn’t said how much.

Any extra support measures will be announced by Prime Minister Kyriakos Mitsotakis on September 10, in his keynote speech at the Thessaloniki International Fair, the report also said.

Finance Minister Christos Staikouras  told SKAI TV that tourism was the saving grace with more full and direct flights from the United States, even with the loss of Russian airlines banned under European Union sanctions for the ongoing invasion of Ukraine.

Early estimates were that tourism revenue would be about 80 percent of the previous record year of 2019 before the Coronavirus hit in March 2020 but the year is so good it’s likely to match that and bring in 18 billion euros ($18.59 billion.)

“It appears that extra fiscal space will be created during the summer, which will be used in its entirety to the benefit of society from September onward,” said Staikouras but he said that won’t change primary budget deficit target of 2 percent of Gross Domestic Product, not including interest on debt, including bailouts.

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