BUSINESS

Six pillars for recovery plan

EIRINI CHRYSOLORA

Athens’ plan for the use of EU funds must cover substantial needs for the recovery of the country and have good chances of being realized – which should normally worry those drafting it at the PM’s office and the committee led by Nobel Laureate Sir Christopher Pissarides (pictured).

TAGS: Finance

While Chancellor Angela Merkel is trying to achieve a difficult compromise within Germany between the various interests regarding the ambitious Next Generation EU funding project, in Greece Prime Minister Kyriakos Mitsotakis’ office is already forming the framework for the utilization of the 32 billion euros Greece expects to receive from the bloc’s recovery fund.

Kathimerini understands that framework will rely on six main pillars: regional development, digital transformation, green growth, the strengthening of infrastructure, employment with social cohesion, and smart entrepreneurship, mainly concerning innovation in production.

This will not be an easy exercise as the program to be drafted and submitted to the European Commission for approval must be combined and not overlap with the new Multiannual Financial Framework 2021-27, known in Greece as ESPA, from which another 19 billion euros is expected.

Above all, it must cover substantial needs for the recovery of the country and have good chances of being realized – which should normally worry those drafting it at the prime minister’s office and at the committee led by Nobel Laureate Sir Christopher Pissarides. That’s because in the past the grand plans on paper ended up seeing low absorption rates and requiring urgent replanning, as well as a waste of available ESPA resources.

The idea gaining ground in this context is for the program to begin placing a greater emphasis on the financing of reforms, tax breaks etc and push back the major infrastructure projects that require time to mature.

“We shall submit a three-year blueprint. It will not be another ESPA. It will include significant infrastructure projects, but we also want it to concern reforms which we intended to implement anyway, but the coronavirus has deprived us of the fiscal leeway,” says a source who is participating in the planning process.

The same source notes that the government will seek to incorporate in the program the reduction of social security contributions, the social security reform, the reduction to the solidarity levy, and tax cuts in production, exports and energy and generally the taxes that burden production.

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