The European Commission may not be one of Greece’s creditors, but the Vice-President for Budgets has said it will not stand idly by and watch the crisis unfold. EURACTIV France reports.
Kristalina Georgieva reminded participants at a meeting in Paris on Thursday (9 July) that the EU had invested €400 billion in Greece since 2010.
€184 billion of this has been in the form of financial aid, and €100 billion has come from the private sector. But the European budget has also contributed some €41 billion.
“This is a substantial investment. It represents €36,000 per Greek citizen, and we are conscious of the fact that it has born no fruit in terms of economic growth. Now we have to concentrate on certain priorities, like direct investment in SMEs for example, or youth programmes,” the Commissioner said.
Greece has always been a reliable contributor to the EU budget. “Even on 1 July, Greece made a payment of €57 million to the EU,” Georgieva said. Greece contributes €145 million per month to the European budget.
Over the last five years, the country has paid an annual contribution of €2.2 billion into the EU budget, and received around €7 billion per year through various channels (including agricultural subsidies, structural funds). “These finances will continue whatever happens. But we also need to establish safety nets so the situation does not get worse,” the Commisioner stated.
Georgieva avoided the language used by Martin Schulz and Pierre Moscovici, who have both spoken of the possibility of sending humanitarian aid to Greece. “What is for certain is that we are establishing an emergency support programme. We will ensure that medicines are available and strengthen the food distribution programme,” she said.
The Bulgarian Commissioner compared the current situation in Greece to the 1996 Bulgarian banking crisis. Bank closures interrupted the supply chain, leading to panic-buying and causing food shortages. “We may see supply problems for essential products, and we will deal with this,” she stated.
Greek banks have been closed since 29 June, and will not open again until Monday (13 July) at the earliest. A food distribution programme for those most in need is in place, with a budget of €790 million for this year, and the flexibility to carry out emergency operations.
One third of European funds as “pre-financing”
The Commission also plans to alter the finances it provides to Greece. In theory, countries have immediate access to only 1.5% of EU funds, known as “pre-financing”. But in the case of Greece, Georgieva said that the Commission plans to “make 30% of the sums available as pre-financing”, particularly for youth projects. Greece has already received €16 billion of the €36 billion allocated for the period 2014-2020.
The Commission Vice-President added that “Greece will benefit from the Juncker Plan, as it is one of the countries most lacking in investment.”
An overwhelming majority of Greeks voted "No" in a referendum on Sunday 5 July, rejecting the reform proposals tabled by the country's creditors. A eurozone summit was convened on 7 July to examine the consequences of this vote.
Thousands of Greeks took to the streets in Athens with fireworks and flags to celebrate the result of the referendum. 61% of voters chose to reject the agreement proposed on 26 June.