New lockdown would be devastating for Greek economy, Finance Minister warned

He said an 8% recession forecast was included in the state budget

With the recession this year expected to reach 8%, the government’s financial staff estimates that a new lockdown would have severe consequences for the economy.

Greek Minister of Finance Christos Staikouras warned of the risk of further negative economic impact speaking to radio station Real Fm, emphasising that in the draft of the new state budget there will be a forecast for a recession of around 8%.

According to Mr. Staikouras, despite the fact that there are deviations from the initial targets (and it is estimated that they will continue in the 3rd quarter of this year) there is no reason to revise the initial forecasts for the recession.

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Regarding the possibility of a new Covid-19 total lockdown, however, the minister stressed that it would highly detrimental effects on the economy. As he said, “approximate calculations, from the recent experience at a European level, raise the monthly cost of imposing a universal lockdown to about 2.5% -3% of the GDP of each country”. However, as he explained, the Ministry of Finance has sufficient resources (cash amounts to 37.5 billion euros) to finance the measures to support the economy in such a case.

Mr. Staikouras left open the possibility of reviving the old arrears arrangements of 100 – 120 installments in order to enable citizens who missed the arrangements due to the Covid-19 lockdown settle their outstanding debts.