Following the outbreak of coronavirus in Europe and the first steps taken to curb its spread, European organizations have sought to obtain information from their members, pointing to the devastating effects in particular on specific sectors of the economy. PCCI President Vassilis Korkidis welcomes the efforts made by the Greek government, on the one hand, on the measures taken to protect public health, and on the other hand the adoption of the first set of specialized financial measures to address the effects of the spread of coronavirus.
The Ministry of Economics is keen to reduce the + 3.5% primary surplus and proposes to exclude coronavirus spending from the primary surplus. Correspondingly, is Italy's request to increase its budget deficit to -2.5% and an additional 6.5 billion euros to allocate 7.5 billion euros to counter the spread of coronavirus. All relevant Hellenic Ministries are in constant contact with the European Commission to coordinate actions between Member States and mitigate the impact on Europe. However, it requires swift action by the governments of each country and the ability to be able to mobilize financial instruments to ensure liquidity and provide resources, using the current state aid rules. Such capabilities are provided through the 'de minimis' setting or rescue and restructuring systems. The EU must set up mechanisms to help struggling SMEs and additionally direct the remaining funds at European level to provide working capital in the real economy.
At national level, it was properly reviewed and correctly decided by the Hellenic Ministries of Finance, Development and Investment, Labor and Social Affairs, a first set of relief measures suspending the payment of VAT, taxes, installments and insurance contributions by Greek companies in areas and sectors most affected by coronavirus.
Across Europe, alarming messages from businesses in specific sectors are worrying on the impact of the measures following the rapid spread of the virus. Trade fares are postponed, demand shows imbalances, supply chain delays, airline tickets drastic drop, tourism cancellations, as well as consumers abstentions in the regions that have been excluded, have almost stopped economic and public life in many areas. Indeed, in response to the crisis, the IMF has already announced the allocation of $ 50 billion and the World Bank $ 12 billion, while the ECB is on hold, apparently waiting for Eurogroup decisions on 16/3/20 for the economic support. The European institutions need to take immediate action, and the European Commission since last week took the initiative to coordinate information flows between Member States and began developing scenarios to mitigate the impact on the European economy. However, a rapid response is needed that will provide resources to businesses affected and continue to be hit by the "health crisis" in order to avoid a pandemic of bankruptcies and the loss of thousands of jobs in the commerce, transport, shipping and tourism sectors.
The PCCI, through interventions in European organizations, is asking the EU to allow Member States to use the opportunities offered by state aid rules to use financial instruments that provide direct and indirect liquidity. PCCI also proposes to suspend the payment of loans to companies that are at risk even with the close down of their activities. Also calls for each Member State to be given sufficient financial space without calculating the costs of dealing with the coronavirus in the primary surplus targets. The ECB must believe that the European Commission should step up incentives in the Member States and at this time to create "prevention mechanisms" instead of repressing businesses with sustainability difficulties. Experience in the «Early Warning Europe» project can be used to quickly implement crisis response. The EU must also ensure that measures taken by Member States do not create disproportionate barriers to the free movement of EU Community goods, while stabilizing cross-border value chains should be a priority. The EU must immediately release all remaining funds from the multiannual financial framework and redirect it to the affected companies.
Finally, PCCI President V. Korkidis underlines: “We are all confronted with two crucial parameters, time and fear. The up date losses in the Greek economy are estimated at 0.3% of GDP and about 600m euros, but will increase with geometrical progress as the outbreak of coronavirus continuous to spread. Like medicine, the economy is looking for the antidote to the "health crisis". The EU is required to respond proactively and quickly to limit the impact and to financially support entrepreneurship and employment in its 27 member states. "
