Greece has announced €1 billion in new stimulus measures to support the flailing tourism and leisure industries, and the Cabinet has approved a €57 billion recovery plan that could create up to 200,000 new jobs.
Finance Minister Christos Staikouras said during a March 29 news conference that the €1 billion coronavirus support package is aimed at preserving jobs and keeping the businesses most affected by shutdowns and economic slumps afloat. The package includes deferrals for tax and social security contributions, rent relief, subsidies, and unemployment benefits.
Deferrals for tax and social security contributions will apply to companies on which restrictive measures, such as forced shutdowns, have been imposed during the month of March. These include retail, catering, tourism, culture, sports, transportation, and other industries that must remain closed, said Staikouras. The government has also extended the deadlines for payment of certified debts from VAT returns.
Companies subject to shutdowns are also entitled to waived rental fees on their commercial real estate during the month of April, said Staikouras. The government will compensate building owners and landlords up to 80 percent of the monthly rent.
The announcement of additional relief came several days after the government announced €2.5 billion in business bridge aid and fixed costs coverage. Over the last year, Greece has released €38 billion in aid for businesses, households, and employees, Staikouras said.
During a March 29 meeting, the Ministerial Council approved a €57 billion national recovery plan that is expected to create 7 percent GDP growth and permanently increase jobs by 180,000 to 200,000, according to a March 29 statement from Deputy Minster of Finance Theodoros Skylakakis.
All EU member states are required to submit national recovery and resilience plans for the European Commission to disburse €672.5 billion in funds, which the EU will borrow as part of its €750 billion coronavirus recovery package.
Greece’s recovery plan will focus on the digital transformation of government services; large investments in health, education, and social services; and improvement of the country’s environmental footprint through “green” economic policies, Skylakakis said during a March 30 interview with Greek radio station First Program.
Prime Minister Kyriakos Mitsotakis said the plan “is a unique opportunity to radically change the Greek economy’s model and lead it towards a more outward-looking, competitive one with a more efficient and digitalized state and a tax system friendly to growth.”
Greece will concentrate further on 13 important reforms and investments in its recovery plan, including the digitalization of tax services, according to a presentation Staikouras made at the March 16 Economic and Financial Affairs Council meeting.
In his ECOFIN presentation, Staikouras said Greece will also look at new ways of fighting tax evasion through artificial intelligence and online monitoring, the introduction of connected registers and point-of-sale machines in tax services, and electronic pricing receipts for private sector businesses.
The Parliament will discuss the plan before submitting its final form to the commission in mid-April for review and any adjustments.
Greece has attempted to lure investment during the pandemic by offering several tax incentives for foreigners and reducing taxes for companies struggling because of the crisis. In the first several months of the pandemic, Greece put €24 billion toward saving jobs in the travel and tourism industry, which included temporary VAT cuts on some products and reduced advance tax payments.