The Economic Effects of Covid in Greece.
Introduction
A rise in the borrowing costs because of the current situation has halted the Greek plans of tapping into the bond markets this year. They have already issued a successful 15-year bond in January and were now planning again, but it currently seems they are not able to tap the markets again.
Greece had not used its buffer of unused bailout loans and the money raised from the markets which amounts to 30 billion euros (Finance minister says coronavirus has suspended planned bond issue, 2020).
The government would use all the available means at the right time in order to save the economy, as quoted by the Finance Minister. Taking everything into account, they have furnished with the three after measure to keep the economy above water.
The first measure concerns businesses in the affected areas. They are required to pay the interest only and not the capital until September 2020. The second measure includes providing interest-free loans to prevent the collapse of businesses such as tourism, leisure and catering.
Synopsis
The third measure includes the negotiations by the government with servicers and the institutions so that the halts in payments would not put the loans in the default category.
Taking in consideration the situation Greece is facing right now, the economy might end up in recession because of the pandemic. Greece’s economy has already suffered the last decade till 2015-16, where the GDP had fallen by over 26% and the unemployment rates had gone up by 29%, but it had turned around the situation in its favour and had started growing again by 2017, and had been growing since then.
The projections made by the economists in the beginning of the year looked promising that it might grow by 2.8%, but it no longer seems possible, and it seems that there might be a contraction in the economy by 3%, while the rest of the world faces the contraction of 2.5%.
Stats
The tourism industry which seemed to provide a generous contribution to Greece’s revenue, might take a lot of time to recover because people are still uncertain to get out of their homes, and it seems that they might not leave their respective places for a while.
A similar situation is being faced by the other European nations as well. Though Greece has funds as stated by the finance minister which will be used in the right time, the country still needs to be careful with the borrowings it does, as it had recently gotten out of the international bailouts (2010-2018).
The measures taken by the government to restrict the growth of covid-19 in their country is working well so far, as well as, the measures for suspension of tax payments for six months and the condition to the corporations that the employees will not be suspended, has kept the hopes of people up, that after the outbreak ends, it all may not be bad.
The country has already gone on a lockdown on March 23, 2020 for a period of 14 days. Moreover, the aid being provided to the business in the form of interest free loans might help in keeping economy afloat.
People think that due to the covid-19 outbreak, and the resultant shutting down of economies across the globe might lead to similar situation of recession of 2008 or may be worse, which in many cases is true because of many businesses going bankrupts and into losses.
The economists all around the world are hoping that the situation does not become much worse to end up like that, yet on the off chance that it does, the whole world will go into a recession.
They desperately have been taking measures, the interest rates have been cut down to support the businesses, and to encourage people to borrow more.
Data and analysis
Last time in 2008, the banks did not have any infusion of cash which they required, but this time, we have governments all around the world stepping up to aid the banks along with World Bank and IMF to help the countries in the state of dire help. But it still seems impossible to see the situation in a hopeful light, that the economies might be saved.
It is also because that it cannot be predicted as to when the virus will be completely eradicated from the world, and seeing the current scenario, it is not going to end anytime soon. China has already recovered from the pandemic, and now it has been sending its aid abroad. And this might just save China’s reputation and economy, which it has regained a control on by recovering from the virus itself, and thus, it might be saved from recession.
India as well, might just have a possibility of not going to recession, because of the immediate measures taken by its authorities. But the rest of the world, may not be able to revive from the recession since the circumstance is deteriorating step by step as the increase in death rate takes a toll on the world economy.
While the world may cry because of what has been happening to them from the past few months with a complete halt in any type of activities, a lot good has also come from it as well. Individuals for now have overlooked all the social, cultural and political differences and have come forward to help each other in the time of need.
Nations have been concentrating more on helping their citizens, making their health a priority for them, and seem to have forgotten about the differences among themselves. People have a sense of gratitude towards the doctors and the healthcare staff who have been working day and night towards the advancement of wellbeing of their residents.
Conclusion
As countries across the globe have gone on a lockdown, it had kept people indoors due to which, there has been a heavy reduction in air and water pollution. The images of earth from space have shown clear skies over the world’s most polluted cities as well.
The earth which was on the verge of collapsing in the near future, has now finally got the time it needed to heal itself. We may not know what may happen after few months from now, but today in this very moment, we have realised one thing that the current situation has brought us a lot closer to each other. We are not people of different nations, but we are the citizens of earth, who are fighting together to get rid of this pandemic as quickly as possible. We also may not know, what will be the outcome after the virus, but I want to believe that whatever may the outcome be, it will be something good.