Commission: avoid Greek drama with Recovery Fund first tranche

Greece will receive €17.8 billion in grants and €12.7 billion in loans under the Recovery and Resilience Facility (RRF). [EPA-EFE/JOHANNA GERON]

There is a political order from the leadership of the European Commission to grant Greece the first tranche of the Recovery Fund, the EU’s coronavirus recovery fund, even though the necessary reforms have not been carried out, EURACTIV was informed.

On 15 October, Greece is expected to request to receive the first tranche of the Recovery Fund.

An EU diplomat told EURACTIV that EU bureaucrats intended to recommend blocking the tranche as Greece has not implemented the necessary reforms to pave the way for the first payment.

However, EURACTIV was informed that the leadership of the executive does not want troubles with the Recovery Fund at this stage, fearing shaking international markets.

“They don’t want to cause uncertainty in the system at least at the first round […] they want to send a clear message to the financial markets about how robust the Recovery Fund mechanism is to help Europe stand on its own feet,” the diplomat added.

The diplomat, though, did not specify which exact reforms the Greek government has not advanced. EURACTIV Greece contacted the economy ministry for a comment, but no reply was forthcoming by the time of this article’s publication.

Greece will receive €17.8 billion in grants and €12.7 billion in loans under the Recovery and Resilience Facility (RRF).

EU partners have already expressed their concern that the Greek state would prioritise “safe” investments – which would have anyway received money from the banks – and not high-risk investments in sectors and SMEs that were dealt a severe blow during the pandemic.

SMEs have long complained that they are blocked from banks’ lending.

In an exclusive interview last week, Greek finance minister Christos Staikouras told EURACTIV Greece that the Greek government will incentivise SMEs that are hard-hit by the pandemic to merge to ensure financing from the Recovery Fund.

(Sarantis Michalopoulos | EURACTIV.com)

Subscribe to our newsletters

Subscribe