FINANCE

First EU cash in by end-July

Athens can expect the disbursement of more than €4 bln unless other states block process

first-eu-cash-in-by-end-july

Greece is among the first group of European Union member-states to submit the final version of their post-pandemic masterplan ahead of the proposed date, April 30.

The course toward the activation of the Recovery and Resilience Facility (RRF), the main instrument of the Next Generation EU fund’s resources, was the main subject of discussion among the EU finance ministers in Friday’s Ecofin teleconference.

According to an EU diplomat, Greece, Spain, France and Portugal will be the first countries to send the European Commission their proposals through which they will seek to secure their share from the RRF.

The Greek blueprint will then be assessed not only by the Commission but also by the European Council. In theory, the process may last as long as three months. The Commission has two months to assess the plan, during which a complex set of legal justifications and bureaucratic procedures should be completed. The Council will then have another month for its own approval.

More than 50% of the Greek RRF, which has a total budget of 57.5 billion euros, consists of the European resources: Out of that €30.9 billion due, €18.2 billion will be in grants and €12.7 billion in loans.

Based on the advance funding provisions of 13%, and provided there are no delays in the member-states’ ratification of the Next Generation EU fund, the first disbursement to Greece, amounting to €4.07 billion, can take place in late July. This will be followed by new disbursement applications, up to two per annum, depending on the achievement of specific reform and investment milestones.

At end-2022, any member-states that have not included their total loans due from the RRF in their original national plan can still ask for the remainder, explaining why they did not claim it in the first place. This does not apply to Greece, as the Greek government is set to claim the entire amount of its share.