"The Greek economy has endured. In 2020, according to the provisional data of ELSTAT, it seems to close with a recession of around 8%. Greece has the second best performance in curbing unemployment. "The padlocks were limited and given the current inability to consume, at least, private deposits are increasing, which means that for consumption after the pandemic."
This was stated by the Minister of Finance Christos Staikouras at the 3rd online seminar held today by the Hellenic Confederation of Trade and Entrepreneurship, in the framework of the "Future of Retail 2040" initiative.
According to a statement from the confederation, the minister said "a total of 27 billion euros have been taken to support households and businesses. The additional measures will be 8,5 billion euros, bringing the bill to 11,6 billion euros for 2021, and a total of 35,6 billion euros for two years. "The declared goal of the government and the Ministry of Finance is to deal with the high private debt, which has increased in recent years, by protecting the most vulnerable households affected by the crisis."
Efi Ahtsioglou, Member of Parliament, Head of Finance SYRIZA stressed"Unless the new generation of debt born in the pandemic is addressed, it will limit consumption and investment, have a rapid impact on employment and public revenue, and pose a risk of general bankruptcies, especially for low- and middle-income citizens." For debts to tax authorities and insurance funds, we propose a complete write-off of interest and a cut in basic debt in stages, depending on the income loss rates. For debts at least to PPC, a scheme of at least 24 installments. Checks require a restart fund, so that the day after the lock is lifted, small and medium-sized enterprises will restart their operations. One-time support for small and medium-sized businesses for their families' living expenses ".
Michalis Katrinis, Head of Development and Investment of the Movement for Change He said: "Loan suspensions have eased the problem a bit, but today more than 90% of loan suspensions have expired. Most of the bank loans given were to large companies and guaranteed by the Greek state. Even in the Development Bank programs, only 30.000 companies have access to loans, ie only 4% of the business codes. 70% of the aid amounts through the Repayable Advance Payment in 2021 must be non-repayable. You need a special banking tool that will solve the problem of unsecured checks. To apply a 120 installment arrangement for all debts with a 30% haircut for a one-time payment ".
The president of ESEE George Karanikas stressed: "We want to convey the anxiety and even the despair of our colleagues about the private debt. There is a need to find solutions that must take into account the viability of entrepreneurship the next day. Small and medium-sized enterprises have come under particular pressure. Even healthy businesses, which have endured the negative effects of the financial crisis since 2008, are now called upon to adapt to an extremely unfavorable economic and business environment, which may call into question their viability and turn them into unsustainable . The big problem in the trade is the postdated checks and their management the next day. In addition, there is a need to establish an unseized business account, which will be an extremely useful tool. "
In the section "Private debt and small businesses" George Pitsilis, governor of AADE underlined: "The sectors that received the strongest pressure during the pandemic are those that require human contact and service (tourism, trade, etc.). The plans of AADE are the acceleration of the debt characterization process that can be collected with realism and courage. "When the pandemic ends and the economy recovers, AADE should be ready to respond to its new role and then a more complete assessment of the situation can be made and the appropriate measures to deal with private debt can be proposed."
Emilios Avgouleas, professor and Chair Of International Banking Law and Finance "The health crisis is systemic and affects all the economies of Europe and the world. The solutions that can be proposed for the settlement of the private debt can focus a) on the taxation of the surplus of the turnover of those companies that increased their turnover during the pandemic at European level and b) on the use of the resources of the Recovery Fund for the creation of a "factoring" capital, with criteria that will guarantee the modernization of companies (eg the use of a common European supply chain) ".
Panos Liargovas, professor at the Department of Economics, University of Peloponnese and president of KEPE, stressed: "The landscape after the pandemic will look like a landscape after a war. The problem of private debt will become more acute after the end of the suspension of payments. However, Greece is not alone this time. "The next day, international banks and investors will be called upon to finance economies and businesses with much higher debt. A prerequisite is the preparation of a credible Plan that will guarantee the implementation of reforms, the adoption of innovative production methods and the protection of workers."
Nikos Karamouzis, President of Grant Thornton Greece He said: "The creation of the Recovery Fund is definitely a positive step but it is necessary to be accompanied by recruitment in companies. The way out of private debt should be sought in accelerating the consolidation of businesses through banks, in adopting a braver treatment of bad debts, in public participation in the consolidation of businesses and households, in ensuring the cooperation of debtors under the new legal framework and achieving high rates of economic growth (> 3%) ".
Valia Aranitou, Associate Professor at the University of Crete and 8th Director of INEMY-ESEE He said: "The pandemic is expected to increase the risk of debt for both businesses, especially SMEs and households and therefore act as an accelerator of a new cycle of economic downturn, negatively affecting the prospects for a sustainable exit from the pandemic crisis. In Greece, the private debt (ie overdue debts to AADE, wider financial sector and insurance funds) amounts to approximately 234 billion euros, ie 127,5% of GDP ".