Greece is threatened with a loss of more than 2.5 billion euros if the Israel-Iran hostilities continue
The Greek economy is facing an extremely unfavorable scenario as a result of the ever-increasing tension in the Middle East, with estimates by agencies and calculations by market players indicating that, if the conflict between Israel and Iran continues for at least a quarter, the cost to Greece could reach as much as 2.6 billion euros, hitting key sectors such as tourism, energy, trade and shipping .
Regarding the energy sector , although our country does not directly import oil from Iran, turbulence in international energy markets is expected to leave its mark on the Greek market. In the event, for example, that international price increases in oil and natural gas reach 20%, Greece will be forced to spend more than 1 billion euros on energy imports , an amount corresponding to approximately 0.4% of GDP. Of course, this -unbearable- financial burden will be directly passed on to households and businesses, through increases in the cost of transportation, heating and electricity, reinforcing inflationary pressures and creating a new wave of price increases .
In the event of a restriction or even a complete interruption of the passage through the Strait of Hormuz – a key passage for maritime oil transport – the impact on Greek shipping is expected to be catastrophic . As reported today in a report by the newspaper “Ta Nea”, insurance coverage for ships operating in the region may increase significantly, causing costs of 300 to 500 million euros for Greek shipowners, while delays and increased freight rates will significantly burden cargo flows.
Middle East: How the crisis is affecting the Greek economy
A serious blow to tourism too
The fact that the start of hostilities between Israel and Iran coincided with the (official) start of the summer season in our country has already begun and is leaving its mark on the tourism sector, as a wave of cancellations is already being recorded by travelers coming from Israel and the Gulf countries , regions which contribute significantly to Greece’s tourist traffic during the summer months.
Already, according to calculations, losses for the May-July quarter may reach 800 million euros , as in some destinations cancellations have reached or even exceeded 15%.
Furthermore, potential insecurity in the wider Eastern Mediterranean may also affect tourists from other markets , such as the Balkans and Central Europe, causing wider disruption to tourism planning for this season.
Regarding trade, an increase in the cost of products imported from Asia is expected , due to delays and more expensive transport. Price increases in consumer goods may range between 5% and 7%, with a total economic burden of 200 to 300 million euros in just three months.
For now, the government’s intervention is limited to controls on the fuel market , in order to limit the phenomena of profiteering. Since last Saturday, intensive controls have been implemented at gas stations, with Development Minister Takis Theodorikakos underlining that ” there will be no tolerance for phenomena of unjustified increases .”
