FINANCE

Positive feedback on payment of EU fund tranche

Positive feedback on payment of EU fund tranche

The European Commission announced on Monday that its provisional assessment on Greece’s progress regarding the 15 milestones the country had to reach in 2021 has been positive, giving its nod to the disbursement of the first tranche of the Next Generation EU fund resources amounting to 3.6 billion euros.

As Alternate Finance Minister Thodoros Skylakakis stated, “We are entering the final stretch toward the disbursement of the installment within April.” The next step will be the opinion of the economic and monetary authorities in Brussels within four weeks, and then the final approval by the European Commission.

Out of the €3.6 billion due next month, €1.72 billion concerns grants and €1.85 billion will be in the form of loans.

Commission data show that Greece is the fourth country to have submitted a payment request (only five member-states have done so to date), with only one disbursement made so far (€10 billion to Spain). Athens also collected the up-front payment of €4 billion last August.

Nevertheless the fulfillment of targets and milestone for the next few tranches looks increasingly difficult, both in terms of volume and of content. The following installment, amounting to €1.97 billion (grants only) requires the fulfillment of 25 milestones and targets by the end of the year’s first half, while the one after that, a tranche of €4.09 billion (of which €2.12 billion comprises loans), is associated with another 44 requirements due by year-end.

In total there are 69 milestones required for this year: They concern reforms in the sectors of renewable energy sources and refuse management, in urban and railway transport, in helping people with disabilities, in modernizing the economy with the digitalization of small and medium-seized enterprises, in smart manufacturing and industrial parks, as well as the reform of the context of lifelong learning.

Thus it appears that after the end of the post-bailout enhanced surveillance, probably in August, the rush for reforms will continue until mid-2026 regarding the targets and milestones of the Greece 2.0 plan. The peak of the effort will have to be in the second half of 2025, when more than 100 requirements will be due.