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Greece extends pandemic support as the economy rebounds this year

A general view of a beach during the official reopening of the beaches to the public following the easing of measures against the spread of coronavirus disease (COVID-19) in Athens, Greece, May 8, 2021. REUTERS / Costas Baltas

Athens, September 13 (Reuters) – Greece said Monday it would pump more money into its economy to support pandemic-hit businesses and households as a stronger-than-expected growth forecast for the year gives it fiscal space for a number of relief efforts.

Greece weathered a decade-long financial crisis in 2018, but suffered another 8.2% slump in its economy last year as restrictions were put in place to curb the spread of COVID-19, which also affected its vital tourism industry.

This year, the economy will recover 5.9%, more than the 3.6% previously forecast, Prime Minister Kyriakos Mitsotakis said on Saturday as he outlined a series of tax breaks. Continue reading

Finance Minister Christos Skaikouras said on Monday that the forecast was “absolutely realistic. It could even turn out to be conservative”.

The government will spend 4.4 billion euros in the second half of the year, bringing the total amount of pandemic support for 2020-2022 to 42.7 billion euros, Staikouras said.

Greece is also considering the first issue of a green bond, Staikouras said, joining a number of European countries that have issued green bonds to fund projects with environmental benefits.

He did not provide a timeframe, but a senior Treasury official said this could happen in the second half of next year and “must include mature projects before publication”.

For the last few years of the European Union and International Monetary Fund bailouts in 2018, Greece has relied solely on the markets for its funding needs. Staikouras said the government was considering early repayment of loans to the IMF and euro area countries.

A Treasury Department official said it could be in 2021 or 2022.

Reporting by Lefteris Papadimas and Karolina Tagaris; Editing by Alex Richardson

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