German Chancellor Angela Merkel (r) chats with Greek Prime Minister Kyriakos Mitsotakis (l) and Spanish Prime Minister Pedro Sanchez (c) on the fourth day of the European Council summits, in Brussels, on July 20. [EPA]
The decisions reached by the leaders summit in Brussels last month on the European Union Rescue Fund may have been beneath the expectations cultivated by France and Germany’s initial proposal, as they reduced the level of grants by 22% and increased loans by 44%. And the realization that Europe’s grand visions are often cramped by political expediency at a lesser, national level (Dutch Prime Minister Mark Rutte might have had a completely different stance if he wasn’t facing elections next March) may also cause some bitterness. But the fact is that the EU’s Next Generation post-Covid recovery plan is an important step toward its further integration. It is the first time that the European Commission will borrow money on behalf of the entire European Union, with 52% of that being distributed among member-states in the form of grants.
Greece can expect to receive 32 billion euros from the EU Recovery Fund, of which €19.5 billion will be in grants and €12.5 billion in loans. It also has funds reaching €40 billion from the new National Strategic Reference Framework (known in Greek as ESPA), including both national and private participation. The total comes to more than €70 billion.
This does not mean that Greece has been given €70 billion nor that it will be raining money for the next seven or eight years. It means that between 2021 and 2027, Greece will need to design and implement projects and initiatives worth €70 billion. The absorption of community funding, however, has never been this country’s strong suit. The experience of four support ESPA programs has amply demonstrated that we do not have the political personnel to shape strategy, nor the public administration to define the work that needs to be done to implement the strategy, to describe it precisely, to assign it and to carry it out. The last four ESPAs were a race to absorb community funds as fast as possible, often with the tolerance of the Commission (which explains why the Netherlands and other member-states did not want leave control of the Recovery Fund entirely in its hands).
Now Greece will have to absorb what amount to two ESPAs in the same length of time. By the end of 2022, in fact, we will have to have submitted finalized proposals for projects and initiatives worth €22.5 billion, along with another €10 billion’s worth by the end of 2023.
The decision by EU leaders is an opportunity and an enormous challenge for Greece. And based on the experience of the past, we are more likely to fail than to succeed. The sooner we acknowledge our utter unpreparedness, stop celebrating and start worrying, the faster the relief at not having another bailout with strings attached will be replaced with a sense of the enormous responsibility resting on our shoulders, and the greater the chance of the EU Rescue Fund becoming truly historic for Greece.