Additional €500-600 million to be earmarked for recovery
An additional budget of 500-600 million euros is being earmarked by the government to cover recovery needs in flood-struck central Greece, according to Finance Ministry sources.
The exact amount will be determined once authorities have a clearer picture of the extent of the damage and how much money will be needed in the immediate future for initial compensation claims and damage repair.
It will also be shaped by Greece’s target to maintain a primary budget surplus of 0.7% of gross domestic product this year, as agreed under the Stability Program with creditors in April.
Maintaining the target – which had risen to 1% of GDP before storm Daniel brought it back down to 0.7% – will also be aided by unused European funds worth €250 million from the 2014-2020 Partnership Agreement, as outlined on Tuesday by European Commission President Ursula von der Leyen.
With regards to the funding Greece can expect from the European Union to help with the massive recovery effort that lies ahead following von der Leyen’s announcements on Tuesday after her meeting in Strasbourg with Greek Prime Minister Kyrakos Mitsotakis, government sources clarified that:
The €250 million from the 2014-2020 Partnership Agreement will stem from funds that could not be absorbed for other purposes and will be disbursed by the end of the year;
Some €500 million will come from reorganizing the priorities of the Recovery Fund so that infrastructure restoration projects in central Greece are included;
And around €1.5 will be drawn from the new Partnership Agreement for 2021-2027, which is only just getting started after a redistribution of resources.
In reality, therefore, only the €250 million can be regarded as additional funding from the European Union, in the sense that it would have been lost were it not channeled into the recovery effort. The remaining €2 billion is simply being redirected from other purposes.
Von der Leyen also spoke of Greece’s ability to mobilize Common Agricultural Policy fund reserves and from the 2024 Solidarity Fund that can provide up to €400 million. According to a Finance Ministry Source, Greece can draw at least €100 from that source, which will also be additional funding.
