The successful management of the coronavirus pandemic by the government is rewarded, Ferdinando Giugliano wrote in an article published on Bloomberg entitled: “Greece Looks Like a Safer Destination Now”.
Giugliano says that the Prime Minister, Kyriakos Mitsotakis, was able to reopen the domestic economy before other countries, which will reduce the blow to the Gross Domestic Product (GDP).
In addition, the article emphasises Greece’s reputation is improving. “One reason not to invest in Greece was the expectation that it would handle a crisis worse than others. That meant some foreign companies held back from pouring money into the country. The skepticism is starting to disappear. Last year, the Athens stock exchange index was the world’s best-performer — a sign of growing confidence in Mitsotakis’ reformist administration.”
Giugliano points out that Greece has one of the best performances in the EU in terms of Covid-19, thanks to the government’s quick decision to impose restrictive measures and widespread compliance among the population. The recorded deaths from this virus in Greece so far amounts to 185, out of a population of about 10.7 million people — equivalent to 17 deaths per million people.
However, the economic blow to Greece is likely to be similar to that of other Southern European countries, as its economy relies heavily on tourism, Giugliano notes.
Greece, he said, “still has serious vulnerabilities. The ratio of government debt to GDP is the highest in the eurozone and among the highest in the world. This year’s recession and the sharp increase in borrowing will add to that. The country’s financial system was slowly on the mend thanks to the launch of Project Hercules, a program of state guarantees. But banks’ exposure to bad loans still stood at 40.6% of total lending in December.”
However, Giugliano adds, Greece is aware this time around that it is not alone, as debt will rise across the eurozone.
“In the uncertain world ahead, it will be much harder to single Athens out,” the article concludes.