FINANCE

Two key dates for EU deposit

two-key-dates-for-eu-deposit

After the European Commission’s approval of the “Greece 2.0” recovery blueprint, expected on Wednesday, there remain two key tests for the disbursement of the 13% deposit of the Next Generation EU cash – i.e. some 4 billion euros: the approval by some national parliaments, where this is required, and the ratification by the Ecofin council of European Union economy and finance ministers.

The dates suggest that the final decision will be made at the July 13 Ecofin meeting, given that the German parliament starts its summer recess at end-June, so the parliamentary procedures in the Bundestag will need to proceed fast. Still, Greek government sources say that nothing can be taken for granted. There is also another Ecofin meeting scheduled for next month, on July 23.

“What’s certain is that Greece will form part of the first batch of states to get the approval and the deposit,” a government source assured.

In fact, the worst possible scenario is for a delay in the disbursement – i.e. from July to August or even September. No country will be able to block the deposit, especially since the process for the decision does not provide for a veto option.

After Wednesday’s approval of the first few national recovery and resilience programs by Brussels, the onus will be on the national parliaments of countries such as Germany, Denmark, the Netherlands and Finland for approval of the programs’ application. They will authorize their national finance ministers to vote for or against each program at the next Ecofin meeting.

Then the council of ministers will decide on the programs’ application in a qualified-majority voting process, requiring at least 55% of member-states (i.e. at least 15 countries) with a minimum of 65% of the bloc’s population. That makes it unlikely that the programs will be rejected, even if one or more national parliaments vote against them.

Wednesday’s approval is expected to concern five countries: Greece, Portugal, Luxembourg, Portugal, Denmark and Spain – i.e. the countries European Commission President Ursula von der Leyen is set to visit on Wednesday and Thursday.