Greece, among most of the countries in the world, was hit by the coronavirus pandemic. The Greek Government gradually took necessary measures and, ultimately, forced the country to a general “lockdown” on 23 of March. This led most of the businesses to temporarily suspend their operations and activities, while, at the same time, they were allowed to suspend the employment contracts without being required to pay salaries or damages and cover social insurance obligations. As a general measure, the country undertook the obligation to pay 800 Euros per employee whose contract was suspended.
Despite being absolutely necessary for the confrontation of the pandemic outbreak, the measures had dramatic consequences for the businesses and the Greek economy in general. In regards with the businesses, the most negative impact was the drastic fall of their turnovers and consequently their inability to perform their debt obligations, even for financially healthy companies. For this reason, the Greek Government has proceeded to the announcement of new measures, of financial nature this time, with a purpose to keep Greek businesses, to the extent possible, intact from the impact of the “lockdown” or at least to restrict the negative consequences.
Measures announced to be taken from May 2020
The Greek Government announced on 28th of April the undertaking of financial measures in order to relieve the Greek businesses and employees that were hit by Covid-19 outbreak and support the recommencement of the economy. The most important measures in relation to businesses are:
- Financial aid to the Greek SMEs through loans granted by the Greek State that will be repaid in the next years with minimum interest rate based on each company’s performance. The total value of the aid will be 1 billion Euros, while each company will not receive more than 500.000 Euros. The main criteria require, first, the companies’ turnover to decrease due to Covid-19 outbreak and, second, the companies not to proceed to lay-offs.
- Financial aid to the Greek SMEs through grant regarding business loans interest payments for a 3-month period (April, May & June 2020), provided that these companies were still performing on their debt obligations in relation to these loans and they have not proceeded to lay-offs.
- Starting from May 2020, the Greek companies will be able to receive business loans by the Greek banks up to the amount that correspond to the 25% of their turnover with Greek State guarantees.
- Suspension of VAT and assessed tax debt payments to the Greek State, however if a company pays the April 2020 instalment, a 25% discount is provided. Again, one of the necessary requirements is for the applying companies to retain the employment positions.
Considering that most of these applications can be made electronically through platforms, our law firm assist our clients in the electronic filling and submission of these applications. It, also, uses its contacts to get additional information, if needed, by making using of the available electronic means, so that the applications are properly filled. In these harsh times, the firm provides its advisory services with the best possible manner to assist the companies – clients, especially those hit by the coronavirus pandemic.
These liquidity measures are expected to relieve the Greek businesses which were forced to stop operating for more than one month (11 March 2020 – May 2020) and are now gradually being able to get back to their activities. The measures are considered to be of vital importance if taken into account that the country had just exited an 8-year financial recession implementing harsh economic re-adjustment and austerity measures. Except this, tourism constitutes the backbone of Greece’s economy and the largest contributor to its GDP and it is expected to be severely affected for 2020, as Covid-19 crisis broke out just before the summer.
According to the recently published IMF’s World Economic Outlook report, the projections for 2020 have been substantially altered, as the “lockdown” applied by the most of the Eurozone countries will have immense impact on their economic status. In particular, Greece is expected to lose approximately 10% out of its GDP for 2020, in contrary to the 2.2% GDP increase that was projected for the same year before the coronavirus outbreak. However, the country is forecasted to return to growth in the next year, to 5.1% for 2021. Despite the deeper economic impact for 2020, Greece’s recovery is projected to be more dynamic than other economies, such as Spain’s and Italy’s. This fact is justified by the timely actions of the Greek Government in response to the coronavirus outbreak and the periodic consequences of the tourism’s underperformance for 2020.
In the aftermath of the pandemic
The gradual lifting of the pandemic measures, starting from the 4th of May, earmarks the return to “normality” which will not be the same as known before. The epidemiologists warn that the pandemic is not over yet and the perils of another outbreak cannot be ignored. For this, the Greek Government has set, alongside the economic relief measures, certain rules in order to restrict the possibilities for the pandemic to break out again. These measures purport to minimise the personal contacts that could lead to the spread of the virus.
Among these rules, the most important for the companies are:
- Flexible schedules must be followed for the next months, so that people attend their working place alternately.
- Teleworking must be encouraged, where possible, to avoid unnecessary contacts.
Our law firm, trying to be in line with the recent legislation, has applied new methods in the working environment and in the manner, it delivers its legal services to our clients by making use the capabilities that technology offers today. Indicatively, the firm conduct their usual internal meetings only by electronic means through live video calls, while meetings with clients and fellow advisors are made through teleconferences maintaining the level of the services in the same standards as before. Also, the firm in order to protect its personnel applies a repeating working schedule enabling a certain number of associates/partners to attend the office each time, while in person meetings with clients are scheduled, where absolutely necessary, applying the hygiene rules.