Greece: The credit rating of the Greek economy was upgraded, despite the second lockdown

The government announced that there are 37 billion in cash, of which 50% will be allocated to support the health system, businesses and households. 

The first package of financial measures for the month of November that concerns companies and employees is estimated at 3.3 billion. The package includes coverage of insurance contributions, extension of tax payments and payment of salary of employees who are suspended from work. 

On November 7, the international rating agency Moody’s upgraded the credit rate of the Greek economy. Greece has the ability to raise cheap capitals in the market which will be a great help in supporting the economy and repaying debts. The main reasons for the upgrade, the house said in a statement, are: First, ongoing reforms support a sustainable improvement in institutional strength and have already made tangible progress in areas including tax administration and the fight against corruption. 

Secondly, that the country’s growth prospects in the coming years are positive despite the negative short-term impact, especially in the tourism sector. 

It is observed in this analysis that the tourism industry is of great importance as the biggest blow to the economy has been the decline in tourism due to travel restrictions. 

The budget prepared states that the recession of the economy will be 8.2% and the public debt will reach 337 billion (197.4%). Of course there is a great deal of uncertainty and any adjustment is possible but the forecast for the recession certainly seems to be falling from 10% in previous months. 

Europe will play a very important role in the recovery of the Member States’ economies. The European Commission is proposing the creation of a new recovery instrument, Next Generation EU, which will be part of a strong, modern and renewed EU long-term budget. The European Union funding program is based on three pillars: 

1. Support for Member States for investment and reform. (€ 630 billions) 

2. Restart the EU economy by providing incentives for private investment. (€ 511,3 billions) 

3. Utilization of lessons learned from the crisis. It refers mainly to the part of health. (€ 122,3 billions) 

2020 will close as one of the most difficult years for the global economy due to the pandemic. The same goes for the Greek economy, but there are the tools and funds, as mentioned, to deal with the pandemic and help the economy to recover.

‍