Interview with Christos Antonopoulos — ACCOUNTANCY GREECE

Christos Antonopoulos, Partner at UHY AXON Certified Auditors, analyses the impact of the pandemic on the Mediterranean region and how Greece responded. He spoke to Hugh Wilson, Editor-in-Chief of UHY Global magazine, which originally published this interview.

How badly was tourism in the Mediterranean region affected by the pandemic?

The coronavirus pandemic continues to negatively impact both the Greek and global economies. The virus developed into a global health crisis with enormous economic and social repercussions. The distinctive feature of the current recession is that it primarily affected the services sector, which is typically more resilient than other sectors of the economy. Given that recovery from a services-led recession is usually slower than recovery from a goods-led downturn, the continuation of the current situation could act as a brake on growth, widening inequalities, pushing the Greek economy towards stagnation, and undermining long-term development prospects.

Tourism is one of the sectors of the Greek economy that was severely hit by the pandemic, recording dramatically reduced figures. Total revenues for 2021 were expected at EUR 12 billion, compared to EUR 18 billion for 2019. International arrivals reached 8.6 million in the first eight months of 2021, significantly higher than the same period in 2020, but noticeably lower than the same period in 2019.

How did your clients in this sector respond to the difficult conditions?

The Greek government established a EUR 800 million programme providing support to businesses operating in the tourism sector affected by the coronavirus pandemic. The programme was co-financed by the European Regional Development Fund (ERDF) and was available to companies of all sizes that recorded a turnover decline of more than 30% in 2020 compared to 2019. The support took the form of direct grants, with a maximum amount per grant of either up to 5% of the recipient’s annual turnover or EUR 400,000 per business, whichever was lower. The goal of the programme was to provide the necessary working capital to beneficiaries. As for modifying the existing business model, many tourism accommodation providers are targeting the so-called ‘digital nomads’, professionals who can now work remotely for extended periods from another city or country.

What is the situation now in Greece?

The effectiveness of the vaccination programme, both in Greece and in tourist-origin countries, enabled a faster recovery of economic activity and population mobility. A full return to normality in this sector likely requires more time. A realistic and achievable goal is now considered to be the return of tourist arrivals and revenues to approximately 70–80% of the high performance levels of 2019, a development that will significantly help in gradually narrowing the balance of payments deficit.

Do you feel that the pandemic is prompting a reassessment of the local economy and tourism’s place in it?

As paradoxical as it may sound, Covid-19 may prove to be a kind of ‘blessing’ for the country, and more broadly. The Greek government’s defined goal over the next six years is to transform its production model and achieve rapid growth. The aim is to maintain tourism as an important part of Greece’s economic activity, while also broadening the country’s productive base, strengthening productive activities, and incorporating new technologies into agricultural production. More specifically, the plan focuses on six pillars:

• Digital transformation,
• Green growth,
• Innovation,
• Skills development,
• Industrial production and
• manufacturing, and Business combined with a social approach.

Which sectors are being encouraged in Greece?

This represents a unique opportunity for the evolution of Greece’s business model, so there is certainly great interest and momentum. The sectors primarily being encouraged are:

• Global Business Services: Greece is seeking to attract global interest in establishing shared service centres, offering significant opportunities for central ‘middle and back office’ functions.
• Audiovisual Productions: The country, through recent legislation, is becoming a film-friendly destination.
• Energy: The abundant availability of renewable energy sources (wind, hydroelectric, biomass, geothermal, solar and solar thermal), combined with major ongoing infrastructure projects in Greece, show that the country will be a key player in shaping the EU’s energy mix.
• Supply Chain: Greece sits at the crossroads of three continents (Europe, Asia, Africa) and has long been a strategic hub for transport in the broader region.
• Information and Communication Technologies: The ICT sector is one of the most promising in the Greek economy, primarily due to demand for automation and digitalisation in both the public and private sectors.
• Food and Agriculture: The food and agriculture sector in Greece is expected to contribute significantly to GDP and value-added growth, due to various key market trends and competitive advantages, including the prevalence of the Mediterranean diet as the world’s foremost example of healthy, natural nutrition.

What else will contribute to the recovery of the Mediterranean region, in your view?

The ultimate measure of a capable and resilient society, country or region is how it handles difficult and complex situations, not when conditions are favourable and prosperity prevails. The fundamental tool required to achieve the goals of the modern era is collaboration. If the countries of the wider region work together effectively, then wonderful things can be achieved in a very short time, and the recovery will be stronger and faster than expected.