DBRS Morningstar said on Monday the European Union’s Next Generation funds (NGEU) constitute a significant opportunity for Greece to implement additional reforms, to invest in the future and to grow its economy over the medium term.
These funds along with other instruments (REACT-EU, Just Transition Fund, European Agricultural Fund for Rural Development) are set to take the sum of EU resources to 2026 to 33.5 billion euros in grants and loans, it said.
DBRS Morningstar views the government’s commitment to implementing investment enhancing reforms by improving the business environment and reducing bureaucracy as positive. It added that Greece’s performance in terms of the absorption of EU funds has improved.
From 2014 to 2020, Greece’s cumulative absorption rate of European Structural and Investment Funds (ESIF) reached 76.6%. Nevertheless, DBRS Morningstar noted that due to its innovative nature, the implementation of this new EU instrument could be challenging and will require strong national ownership of the reform agenda from the government and agility on the part of the country’s public administration.