There is widespread optimism in Athens, as the 32 billion euros in the European package from the Commission’s plan are expected to have a multiplier effect on the economy, provided they are used to the fullest, and the government is preparing to manage the best possible way.
The Greek economy has suffered badly in the novel coronavirus crisis, even though the country’s handling of the lockdown has been praised. According to the European Commission’s Spring 2020 Economic Forecast, the country’s GDP is expected to contract by 9.7 per cent this year – the highest out of all EU countries – and its unemployment rate may reach 19.9 per cent from 17.3 percent in 2019. However, the Commission says a rebound should be expected in 2021.
Due to the global nature of the crisis, exports in Greece are expected to suffer strong declines in 2020. The country’s main export markets are expected to be amongst the worst affected countries, leading to a drop in demand for Greek goods and services, also amplified by the large share of tourism and shipping in exports.
Under these conditions, the government is concerned to show that it has managed the European package well.
A committee headed by Cypriot professor Sir Christopher Pissaridis, who is a Nobel Memorial Prize winner in Economic Sciences, will undertake the elaboration of a new development plan for the Greek economy, according to sources at the Maximos Palace.
The Commission, announced in January, consists of economists who combine scientific expertise, international renown, market knowledge and experience in economic policy design. Its role will now be to present specific views and proposals for the proper management and development of the €32 billion package that Greece will draw, based on the Commission’s proposal for the establishment of the Rehabilitation Fund.
According to Greek government sources, the package will be managed by the country’s political leadership, but the ‘Pissaridis Committee’ will play a central role in the proposals and planning.