Greece to suspend business owners’ debt payments to banks for six months

Greek Finance Minister Christos Staikouras on Tuesday announced the suspension of debt repayments to banks for a period of six months for all business owners with up-to-date accounts as of December 31, 2019, while the government is expected to determine the level of the financial allowance for employees in businesses that have suspended their operations.

In comments made on SKAI television, the finance minister said that for businesses that have closed or are experiencing a major drop in turnover, the government has already suspended all tax and social insurance contribution payments, while banks are expected to announce the suspension of debt repayments for business owners whose accounts were up to date on December 31, 2019. At the same time, ministerial decisions are expected – on Tuesday or Wednesday at the latest – determining the amount and details of the special allowance for employees, along with the protection of their insurance rights.

He also announced initiatives for changes in the payment dates of pensions so that public and private-sector pensioners will not all rush to the banks on the same days and thus avoid phenomena of high traffic and overcrowding. Replying to a question over whether the government could use money from the existing cash buffer, he said that everything was being considered, depending on the severity and extent of the phenomena.

The finance minister outlined spending exemptions gained by the country at the Eurogroup video conference on Monday. According to Staikouras, the 3.5 pct of GDP primary surplus target will not apply for this year and he noted that a new target for the primary surplus will depend on the severity and duration of the crisis at a later stage.

At the same time, it has already been agreed that any updated target will exclude the costs associated with the management of the coronavirus pandemic, whether these relate to health or the support of workers and businesses and the costs of preserving jobs and maintaining social cohesion. In addition, there was an agreement to exclude all spending associated with tackling migration.

To stimulate liquidity, he said that a pan-European “arsenal” has been set up to preserve jobs as long as possible. On health spending, he said that “whatever the health ministry wants, it will have it.”

Commenting on the Greek economy, Staikouras said the economy would be affected and referred to the institutions’ updated estimates on Monday that the eurozone is facing a recession of 1.5-2 pct. “The goal is,” he said, “to get the boat to a safe harbour without returning to the past.”