Monetary Policy in Greece

 Introduction

After a decade long crisis, that caused the country to lose a quarter of its output, the threat of the pandemic on the tourism sector has been restricting from their recovery. 

The travel industry makes up as much as one-fourth of the country's yearly GDP (Gross domestic product) of 181.51 billion euros ($200.3 billion,) raising to 45.37 billion euros ($50.07) in basic incomes and as Greece is confronting solid difficulties from rival the travel industry nations (Coronavirus compromises Greek the travel industry and financial recuperation measure, 2020).

The tourism industry enjoys 20 percent of the workforce of about 4.32 million people. The business is relied upon to endure a basic blow due to the cut back on flights all around the planet, as people are busy concentrating on surviving, rather than planning holidays.

 The taxi business has also gone down by 80%, as people are unwilling to sit in the cabs due to the fear of getting corona virus, also the taxi drivers are unwilling to drive people around in the current situation (BalkanInsight, 2020).  Before the covid-19 outbreak, the tourism minister Harry Theocharis has said that they were planning on making Greece an year around destination and not only a summer place for fun, causing a huge bump in the industry for 2020. But this does not seem possible now, considering the current situation. 

Synopsis

Greek hotels generated a revenue of 8.7 billion euros in 2019,i.e. rise of about 7% as compared to the HSC data of 2018. That’s a big part of the country’s GDP of 181.75 billion euros (COVID-19 threatens Greek tourism and economic recovery process, 2020). This is a sum which the Greeks can't bear to lose and with the assumptions for a shortage driving the public authority to reduce plans for annuity climbs and to restore benefits took from laborers, retired people and the poor during the financial emergency.

 There still has been no word on how Greece is wanting to reimburse the 326 billion euros in 3 global bailouts that started in 2010 an end on August 20, 2018. Greece is still struggling to pay fully to the markets. It has been predicted that the tourism won’t be the only industry to suffer, thus it has been advised to government to prioritize the industry. Because if the industry collapses, the consequences will be severe. It could bring another economic collapse, resuscitating the one that occurred in 2010, when then-Chief and PASOK Communist pioneer George Papandreou requested the first of the bailouts after ages of wild government spending and political support carried the country to the edge of ruin.

With the spring approaching, the hint of optimism that was in the air for all the small business, new hotels, have all vanished in the thin air. The port of Piraeus, which is controlled by the Chinese company COSCO, was planning an overhaul to bring in the larger ships. Because of this, the government had banned the cruise ships, but now, the port is seen as nothing but a ground for a pandemic, which is being avoided by the people.

Data and analysis on trade

The government had forecasted a growth rate of 2.8% for 2020, but it is now put as 2%, as told by the economists. It could fall to 0.9%, as predicted by an analyst at Athens based Alpha bank, depending on the length of the outbreak. Greece's economy is as yet being checked by agents from its loan specialists, the Carriage of the European Association European National Bank-European Solidness Component (EU-ECB-ESM), just as, the Worldwide Money related Asset that partook in the initial two bailouts that totalled 240 billion euros. 

It requires the government to achieve an annual primary surplus target of 3.5% GDP by 2022. But it seems impossible due to the economic effects of covid-19 and the boomerang effect down the line. Vasillikos said that, as for now, they just want the measures to maintain their cash flows and to protect their jobs. 

Greece’s agricultural sector had already faced a challenging 2015, but because of the economic turmoil caused due to the corona outbreak, there might be a fear of uncertainty of disruption of food and wine trade. The closed banks and the political situations arising are not helping with the normal trade either. 

On one hand, people are clearing shelves in the supermarkets, as they are panic-buying, and on the other hand, some food companies are refusing to deliver unless they are paid up front. Key homestead information sources, for example, composts, pesticides and fuel, which are generally imported, require a hard payment of cash, which the Greek government is no longer having. 

The imports have been put on an immediate stop, while the exports have been limited to the currently available transport. Even before Greece was heading towards the default on its IMF loans, there were already problems arising in the agriculture-food sector. 

Russia is responsible for buying one-third of the peach crops of Greece along with its strawberries, but it had been hit badly as well, because last year Russia had banned all the EU food imports. Last year Greece has generated a revenue of 5.5 billion euros from exports (Greek crisis hits olive oil, wine exports, 2015), out of which one third consists of fruits and vegetables. 

Conclusion

The US market imports Greek olives, olive oil, wine and honey. But at that time, the businesses have been told to be careful about transferring payments to Greece because of the perceived risk of IMF seizing funds, as Greece had not yet come out of the 2010’s international bailouts. Meanwhile, the Greek wines enjoy a high demand despite a major competition throughout the world.

 The wines are imported by more than 35 countries and Germany, U.S and France represent about 66% of its exports. The wine business had the option to endure the 2015 emergency, in light of the fact that there was interest for it at home just as across the globe. But, the same can’t be said for the same scenario as well, because the countries are avoiding to import the European goods due to the fear of virus, and for the protection of their people, for we don’t know where this virus could be, as it is not detected till days later.