EU seeks clarity on business lending in Greek recovery plan

“The Greek recovery plan is the only plan that will be slightly changed ahead of Tuesday,” an EU source told EURACTIV. [EPA-EFE/CLEMENS BILAN]

Several EU member states have asked the Greek government for clarifications regarding the selection of the companies that will benefit from the post-pandemic recovery plan’s cheap loans, EURACTIV has learnt.

The requests come after the first technical meetings in the EU Council on the approval of the national recovery plans earlier this week. They will be adopted by the EU finance ministers in a meeting on Tuesday.

“The Greek recovery plan is the only plan that will be slightly changed ahead of Tuesday,” an EU source told EURACTIV on condition of anonymity.

The source explained that several member states, led by Germany, asked questions about the way Greece is selecting companies and what Athens is planning to do to avoid crowding out private investors.

Greece will receive €17.8 billion in grants and €12.7 billion in loans under the Recovery and Resilience Facility (RRF), the EU’s coronavirus recovery fund.

The source said the concern is 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.

The discussion over banks’ lending to Greek SMEs has been a long-standing issue.

Konstantinos Michalos, president of the Athens Chamber of Commerce and Industry, recently said only 15,000-25,000 large companies in Greece, of a total of more than 840,000 companies, have access to bank financing.

“This situation must change under the responsibility of both the banks and the state,” he warned.

The EU source said the Greeks agreed to amend the language in the plan to clarify the features of their solvency support scheme and stress the role of private banks in the programme.

“By agreeing to add this to the text, the Greek government makes clear that they are happy to comply and never intended anything shady in the first place,” the source explained.

Critics suggest that many member states had been sceptical toward the idea of a business lending scheme since the beginning and now want to make sure that the money will not be siphoned to the EU governments’ favourites. (Sarantis Michalopoulos | EURACTIV.com)

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