24 billion for restart of economy and tourism

Greek Prime Minister Kyriakos Mitsotakis announced the programme for the restart of the economy and tourism on Wednesday 20 May.

He announced a 24bn Euro package to "win the economic war" which will be spread between three 'pillars'. The pillars are employment support, tax reduction and boosting business. He said that the programme is a bridge to take us from the recession brought on us by the health 'storm' to recovery and development.

The PM's message:

"I am addressing you once again at the end of the first cycle of the pandemic. It is also the starting point for a new phase focussing on the economy and society.

Today I will present to you the government plan for the coming months. I will tell you how we will protect employment. What tax reductions will be put in place. How liquidity in the market will be strengthened in order to support all businesses, big and small.

I will also tell you what we intend to do to boost the tourism sector, which is so essential for the country.

Up to now we have succeeded in limiting the spread of the virus. We have shielded public health and limited losses. We have supported citizens' incomes and businesses. Our country has been a role model in dealing with the health crisis. And we did this all together.

I would like to thank you all for continuing to act responsibly as we gradually lift the lockdown measures.

We need to maintain the same maturity and discipline in order to transform the coming months into a bridge which will take us from the defence of our health to an attack to bring progress in order to win back lost time and lost ground due to the health 'storm'.

I never hid the fact that the battle for life would have a heavy economic cost. The global cost is already huge - in America there are over 30m unemployed. In Europe both production and demand is collapsing. This is a global crisis the like of which has not been seen for three generations.

For Greece, especially, the danger is perhaps greater. Not only because the crisis has hit key sectors such as tourism and catering, but also because the pandemic set back the country's progress at a time when it was moving with strength into a phase of development.

January and February were exceptional months for the economy, but they now seem to be in the distant past. So it is our duty to grab hold of the rope of progress once more so that from being a role model in our defence against the virus we can become a role model for a return to prosperity.

Our key weapons will be the trust that has been built between citizens and the State and society marching forward guided by an organised Government plan. In this way we will move from the phase of prioritising health and giving support to the economy to the phase of boosting the economy whilst at all time safeguarding health.

This will be followed by the autumn plan to return us to the path of strong development so that in 2021, a landmark year for our country, we can move forward towards a future of optimism.

Fellow citizens,

The programme of transition from today's uncertainty to tomorrow's security will require extra funding from us of 24bn Euros. This is based on three pillars: employment support, tax reduction and boosting business.

It includes the following features: Strengthening of social cohesion by protecting jobs; relief for households by reducing their daily expenses; helping the market to start moving again.

In other words, this package of measures also has a social seal and a development signature. It is, however, adapted to the needs of this particular phase.

The key to the plan is the temporary 'SYN-ERGASIA' programme (cooperation / working together) for employment. Just as the name says it is a cooperation between the State and production so that jobs are not lost at this difficult time.

I would like to remind you that in Greece fewer jobs were lost than in other European countries. Nearly all workers and professionals in the country received special benefit payments and the state completely covered their insurance contributions.

These benefits are being extended not only through May but through the months of June and July for the sectors that have been hit the hardest.

From now on, however, the payments for furloughed workers will be combined with funding for real employment.

I met with hoteliers who asked me how they can keep on all their staff when there will be much fewer customers this year than usual. Catering establishments, which are reopening on Monday after three months, have the same concerns.

Their concerns are justified. I listened to them and my answer is: businesses whose turnover disappeared and who are now facing reduced demand can, until the end of October, can adapt employees' working hours accordingly.

If it is necessary for them to work fewer hours, they will continue to be paid almost the same wages and have their insurance contributions covered. How? The 'SYN-ERGASIA' Programme will cover most of the difference in their pay.

And of course the safety net will always be the basic wage. Unemployment benefit is also being extended so that nobody remains unprotected.

In other words, this mechanism to support employment on the one hand allows businesses that have been hit to breathe once again, reducing labour costs and allowing flexibility, and on the other safeguards employment by ruling out dismissals for those included in the programme and protects income.

With regard to the dilemma - unemployment benefit or work support - I choose to support work. It is the only responsible and realistic answer to the threat of closures to all the economies.

I want to stress once again that this is a temporary measure. Other countries also taking this route include Germany, France and Austria - aiming to recover from the threat of unemployment.

The 'SYN-ERGASIA' Programme is being funded by the European SURE Programme and the first phase will cost 1bn Euros. And, of course, we still haven't taken into account in our plan the European funds we will receive from the European Recovery Fund.

The joint initiative from France and Germany which was announced a few days ago is a significant step towards a Europe of true solidarity.

Fellow citizens,

The second part of the plan involves tax relief for citizens and businesses - especially with regard to tourism, transport, catering and culture.

For the next five months VAT will be reduced from 24% to 13% for all public transport fares. I understand the importance of cheaper transport by bus, boat or plane and I want those who are travelling for their holidays this summer to be able to do so with as little cost as possible.

We wil also be announcing shortly a programme to support domestic tourism for our most vulnerable citizens.

We are also reducing VAT on coffee products and non-alcoholic drinks as well as open-air cinema tickets.

Those involved in the arts and culture are also included in the new programme and they will be supported with special benefits in the coming weeks.

These are sectors which rejuvenate consumption and boost purchasing power. They also boost turnover for tourism and catering businesses. For these sectors the 40% rent reduction is extended for thewhole summer.

Another matter which, I believe is especially critical: Prepayment of tax is finally being reduced. It is truly unfair for someone to be asked to prepay taxes based on the profits of the previous year when these - especially this year- will be much lower.

So there will be a generous reduction on tax prepayments - the exact amount will be announced shortly following a review.

I would like to point out, however, that tax reductions for consumers will be temporary. As I explained, they are bridging measures to take us from recession to recovery in as painless a way as possible.

The third pillar is to help business liquidity.

The second phase of the repayable advance programme is going ahead in May. It will be extended to businesses which perhaps didn't fulfil the criteria in the first phase.

Another 1bn Euros will be made available for this programme. The Business Guarantee Fund will also be activated, making available 7bn Euros in 2020. In this way, businesses can have quick and easy access to funding with the State guaranteeing up to 80% of the loans.

Finally, loan repayments for businesses in specific sectors are suspended until the end of September. The relevant Ministers will be providing details shortly.

The tourist season will begin on 15 June and all seasonal hotels will be able to open on that date. From 1 July direct international flights to our tourist destinations will begin gradually.

There will be sample tests for visitors and our general health procedures will be followed - which will not overshadow, however, the sunshine and natural beauty of Greece.

Our weapons will be the 'passport' of safety, reliability and health that our country has won and our good name as well as the health protection at every resort. And, of course, the Greeks' love and passion inspired by 'Xenios Zeus' (God of hospitality).

Let us, however, face reality with courage. In April and May tourism was at its nadir - whatever we achieve this year wil be a victory.

And I repeat - our priority is to protect jobs and to help businesses in the sector prepare for a major 'counterattack' in 2021. Because protecting employment is a prerequisite for a return to development and mass job losses means an increase in inequality.

Fellow citizens,

Just as we won the health battle, we will win the battle for the economy.

We must, however, show the same discipline, the same adaptability and the same solidarity which brought worldwide admiration for Greece.

My role is to see the big picture and to share in the fairest possible way the weight and responsibility in the crisis. We are in unmapped territory but as a nation we have demonstrated that we are not afraid of difficulties and, most importantly, we are not afraid to change.

How many stereotypes have been destroyed over these last few months? Greeks, whom some said only think of themselves, became a conscientious part of a collective effort. And the State, which often justifiably caused complaints, when it was needed became a protective shield. It didn't just function, but modernised and became more efficient.

Trust took the place of suspicion. We believed in each other. And we all believed in the nation.

I am certain that these will not become sandcastles to be washed away by the summer waves, but it depends on all of us.

I know that for many of you there existed both hope and fear. However, let's hold on to the positive feelings as ammunition in the battle that is coming.

I, personally, feel stronger for having faced in a period of a few months - and almost at the same time - the economic challenge, the migration wave and the threat of the global pandemic.

It was all extremely difficult but we did well. This is why there is optimism for the next day. Because the goal remains one and the same - for Greece to retain its right to change and constantly improve!

At the beginning of the bridge we must cross I call on you to make this summer the epilogue to the crisis and prologue to the renaissance. Let our pride and faith in our strength soar. And, as always, let realism be our compass and a well-prepared plan our map.

And you can be certain that, yet again, together we will do it!"