By Timoleon Palaiologos,
It has been more than a year since the beginning of the ongoing pandemic that has completely altered the reality of our civilization. SARS-CoV-2, also known as COVID-19, is the main culprit of this unprecedented situation. At last though, the vaccination of a great percentage of the population will likely result in the restriction of the virus and will break the chain of transmission, making it an endemic virus similar to the flu, or so most epidemiologists say.
And then, just like that, similarly to the way that it appeared, COVID-19 will no longer be such an enormous obstacle for our everyday life. We will no longer wear face masks in all public areas nor will we be forced to quarantine whole cities. Unfortunately, I firmly believe that we have not seen the worst consequences of the pandemic. The tragic loss of life will obviously be minimized after herd immunity has been achieved through mass vaccination, but the economic and social consequences have yet to be realized. Almost every single economy in the world ran a major deficit for 2020 and forecasts for 2021 are far from optimistic. As a matter of fact, for quite some time, most world economies have been surviving on life support. In the European Union the European Central Bank, so generously, has enacted the Pandemic Emergency Purchase Programme with a budget of 1.8 trillion dollars to support the economies of its members to overcome the aftermath of the pandemic.
Crisis in the near future?
The reality of the past year is pretty similar to a dystopian novel. Whole countries restricting movement of people and goods and every form of social and financial aspect of life was something unheard of prior to the pandemic. At least for developed westernized countries such as the United Kingdom or France. And whilst a nationwide lockdown was a necessary step in order to combat the transmission of the virus, the financial obliteration that most countries have faced as a direct aftermath of this move is enormous. Specifically, it is forecasted that the combined GDP of the European Union in 2020 was reduced by 7,4% compared to the GDP of 2019. In some instances, the deficit stood as high as 9-10% with Greece’s GDP forecasted to decrease by 9%, France’s 9.4%, Italy’s 9.9% and Spain’s 12.4% (statistics provided in autumn 2020 by the European Commission). As a matter of fact, the most optimistic forecast expects Lithuania to be the “luckiest” economy in the EU with a 2.2% decrease of the country’s GDP. Now, theoretically speaking, the GDP of EU member states is expected to make a swift recovery with a combined increase of 4.1% in 2021 and 3% in 2022. And although these figures are a forecast of an institution such as the European Commission, I am personally sceptical about the possible swift and unharmed recovery of the economies.
Tourism Industry
The term “tourism industry” is referring to the supposed “industry” of services that exists around the mobility of people, briefly summarized as tourism. For starters, there are many types of tourism and tourists. The most common form of tourism, and the one that has been promoted by European countries of the south such as Greece and Italy is international inbound tourism. The incoming waves of tourists play a major role in the economies of such tourism-based countries, and as a result, the pandemic has severely impacted their financial structure. In 2017, tourism contributed to 13.0% of Italy’s GDP and employed 14.7% of the workforce. Tourism industries directly employed 2 million people in 2018, accounting for 8.3% of employment. An estimated 216.100 businesses were operating in the accommodation sector in 2018. A similar reality exists in Greece where tourism is one of the most important sectors of the economy and a key pillar of economic growth. Tourism GDP accounted for 6.8% of total GVA in 2017. The sector directly employed 381.800 people in 2018, accounting for 10.0% of total employment in the country. Tourism is an export champion in the Greek economy. Travel exports accounted for 43.3% of total service exports in 2018. Not only that but Greece has steadily invested in tourism in order to boost its unstable economy that has yet to recover from the 2008 crisis. The number of international arrivals in Greece has increased from approximately 17 million in 2012 to 28 million in 2016 reaching 34 million in 2019 by some estimates. However, in 2020 the international arrivals were drastically reduced as covid guidelines did not allow for easy entrance to the country. In order to paint the appropriate picture it is important to take into account that in 2019 there were approximately 18 million international arrivals in Athens International Airport, but in 2020 there were only 5 million international arrivals at the very same airport. These figures highlight the magnitude of the disaster in the tourism industry.
Personal Thoughts
It is an undeniable fact that COVID-19 cannot and will not be the centre of attention of our societies forever. We are relatively close to its conclusion and only the thought of that relieves a pressure that has been hovering over our heads for quite some time. One thing is for certain though, once the direct consequences of the virus start to fade away, only then we will be struck by the chain of events that the virus and our handling of the virus has created. Having said all that though, I need to clarify that all of the above are but a personal concern for the near future.
References
–Dan Burns, M., COVID-19 shook, rattled and rolled the global economy in 2020. [online] U.S. Available here [Accessed 17 April 2021].
-BBC News, Coronavirus: How the pandemic has changed the world economy. [online] Available here [Accessed 17 April 2021].
-Ec.europa.eu, [online] Available here [Accessed 17 April 2021].
-Athens International Airport, [online] Available here [Accessed 17 April 2021].
-Oecd-ilibrary.org, Italy | OECD Tourism Trends and Policies 2020 | OECD iLibrary. [online] Available here [Accessed 17 April 2021].
-Oecd-ilibrary.org, Greece | OECD Tourism Trends and Policies 2020 | OECD iLibrary. [online] Available here [Accessed 17 April 2021].
-Ec.europa.eu, [online] Available here [Accessed 17 April 2021]
