Greece plans to spend more than half of the 32 billion euros ($38 billion) it will get from the European Union’s recovery fund on green and digital transformation projects, its deputy finance minister said on Wednesday (25 November).
The EU’s long-term budget, coupled with its 750 million euros Next Generation EU initiative, will provide a total of 1.8 trillion euros to help repair the economic damage caused by the pandemic.
Greece is to get 19.4 billion euros in grants and 12.7 billion in cheap loans over the next six years, equal to about 16% of its gross domestic product.
“It is a unique and historic opportunity for Greece,” said Deputy Finance Minister Theodore Skylakakis in a presentation of the country’s recovery plan.
He said 58% of the grants, or 8.3 billion euros, will be invested in renewable energy projects, including connecting islands with the mainland electricity grid, 5G networks and infrastructure for electric cars.
Greece, which saw a quarter of its national output sapped by almost a decade of financial turmoil, emerged from recession in 2017 only to be hit by the coronavirus this year.
The government projects a 10.5% economic contraction this year before a 4.8% rebound in 2021.
“We are talking about a lot of funds … our plan will combine investments with reforms,” Skylakakis said.
About 8.1 more billion euros of EU grants will be spent to support employment, develop skills and to fund private investments.
The draft recovery and resiliency plan, open to public consultation, will also make use of 12.7 billion euros of EU loans to attract private investors in funding projects to make Greece’s economy greener and more export oriented.
The minister said the first disbursements from the European fund are expected in June or July next year.