Planning post-crisis recovery
Government drafting blueprint of measures aimed at averting dramatic economic slump
Tax reductions and liquidity supply to enterprises are at the core of the package of financial measures the government is planning to implement when the coronavirus pandemic is put under control. The aim is to avoid the scenario painted by Greek and foreign analysts of a major contraction of gross domestic product this year.
The measures will include the reduction of corporate income tax to 20 percent, the cutting of social security contributions by two percentage points and the slashing of tax deposits, which for tourism enterprises will go down to 50 percent.
Other plans for boosting the tourism sector are the reduction of levies and value-added tax on air transport, on accommodation to 6 percent, on food services to 13 percent and on accommodation in the second half of the year.
In this battle the government will use all financing tools at its disposal as well as any new ones that will be created in the next few months in cooperation with the European Union. In an interview with Kathimerini, Deputy Development Minister Yiannis Tsakiris says that over 10 billion euros of public and private resources through EU subsidies, the Development Bank and other funding instruments will be channeled in the medium term into the economy to relieve it from the impact of the new crisis.
Meanwhile Greek banks expect the new economic crisis to leave behind a new generation of nonperforming loans, totaling up to 10 billion euros according to the favorable scenario, as the coronavirus epidemic is reversing the plans of hundreds of thousands of households and corporations.
However, the immediate impact on the local credit system is projected to be even greater, as besides the bad loans marginally repaid to date the framework of potentially nonperforming exposures will now include loans currently being serviced. The first signs of a new wave of payment delays have already arrived, recorded in the credit to small and medium-sized enterprises.