GREEK ECONOMY: Ukraine War will slash at least 1% of growth

Greek economy Ukraine

Alternate Finance Minister Theodoros Skylakakis predicted on Wednesday that the war in Ukraine will cost the Greek economy at least 1 percentage point of growth.

He also noted, while addressing the OT Forum, that the maximum cost cannot be precisely calculated because no one knows when the hostilities will end.

The Alternate Minister suggested that the discussion on the economic relations between the West and Russia could last a long time.

Skylakakis noted that the threat of a war in Ukraine in 2021 had led to a dampening of GDP growth by 0.3 pct, which meant that the annual GDP growth rate could have been around 8.6-8.7 pct instead of 8.3 percent in that year.

He also referred to the increase of uncertainty in the economy, which created a fragile environment due to the war.

The repercussions on tourism were as yet unknown, he added, while the investment climate may also be affected, though this is not yet apparent for the time being.

For his part, Environment and Energy Minister Kostas Skrekas has called an urgent meeting of the crises management group on Wednesday, ahead of the expiration of the Russian Federation’s deadline – on Thursday, March 31 – for the payment of natural gas supplies from Russia in rubles.

The aim of the meeting is to examine alternative scenarios for ensuring that Greece has an adequate supply of natural gas if supplies from Russia are stopped.

Elsewhere, a labour ministry amendment tabled in parliament, attached to the health ministry’s bill to ratify the Stavros Niarchos Foundation donations, outlines the terms and conditions for handing out an emergency benefit to be paid to vulnerable groups (low-income pensioners, people with disabilities, uninsured elderly persons and those receiving the Minimum Guaranteed Income or Child Benefit) to help them cope with the current wave of high prices.

The benefit is to be paid before Easter, specifically by April 21, following the relevant announcement made by Prime Minister Kyriakos Mitsotakis earlier in March.

The total amount to be handed out is 324 million euros with an estimated 1.7 million beneficiaries. The measures will help roughly 1.4 million households with more than 3.2 million members.

In order to qualify, applicants must have an annual individual income of less than 7,200 euros or a family income that does not exceed 14,400 euros.

The total value of any real estate property owned by the household cannot exceed 200,000 euros, they must reside and pay taxes in Greece and they must have paid taxes in Greece in the year 2020.

The amount of the benefit will be 200 euros, irrespective of the number of a person’s dependents. If both spouses qualify, they will both receive it. It will be tax free, not seizable and cannot be offset against other debts.

The 200-euro one-off benefit will also be paid to those receiving disability pensions, uninsured elderly persons on social solidarity benefit.

If an individual qualifies for the benefit in multiple ways (for example, as a pensioner and disabled person), they will only receive the benefit once.

For those on Minimum Guaranteed Income, in April they will receive double the usual amount, while those on child benefit will receive 1.5 times the usual monthly child benefit.

Elsewhere, a draft bill turning the Organization of Export Credit Insurance (OAEP) into a societe anonyme was approved by majority vote in principle, at the National Defense and Foreign Affairs Committee of the Greek Parliament on Tuesday.

The new formation will be called the Hellenic Export Credit Company SA, and the bill includes ratification of its articles of association.

Ruling New Democracy voted for it in the committee, while SYRIZA, Movement for Change (KINAL) and Greek Solution reserved judgment for the plenary discussion. The Communist Party (KKE) and MeRA25 voted against.

During a hearing earlier, related agencies expressed their full support for it, including the Panhellenic Exporters Association of Exporters with president of the board Christina Sakellaridis who said this was a step long overdue, the Greek Exporters Association (SEVE), the Exporters Association of Crete, and the Hellenic Federation of Enterprises (SEV).

Following the first reading, the second will take place at committee level on Wednesday, while the draft will be tabled in the plenary and vote on Thursday.

READ MORE: Cyprus will send more humanitarian aid to Ukraine on the 5th of April.