ECONOMY

Valdis Dobrovskis: Europe will help Greece navigate this storm

valdis-dobrovskis-europe-will-help-greece-navigate-this-storm

Big results require big ambitions, as Heraclitus famously said. The sheer scale of the crisis that Europe is facing means that we have also thought big with our recovery plan.

We propose allocating 750 billion euros to Next Generation EU, an unprecedented amount for unprecedented circumstances. Greece stands to become one of the largest beneficiaries, with around €20 billion in grants earmarked to help the country recover from this crisis. The Greek economy is particularly exposed since a large share of it is tied to travel and tourism – and that is despite the commendably quick reaction of the Greek government.

Our recovery plan has three goals: to help our economies recover faster, boost growth and make our economies more resilient against future crises. It comes on top of our immediate response to the crisis, including the package of €540 billion agreed by the Eurogroup in April.

The European Union is doing as much as it can to keep credit and cash flowing to our struggling companies, especially smaller ones. To address their immediate needs, we have used the EU budget to provide them with €8 billion in liquidity. The European Investment Bank is generating another €200 billion. And the Commission has proposed setting up a special funding tool to help companies across the EU to avoid bankruptcy.

In addition, EU countries now have unprecedented flexibility in how they use cohesion funds. This is the system designed to reduce disparities between the EU’s many regions. We are also topping up cohesion funding for the next two years with the same flexibility. For example, this money can be used to support SMEs with working capital and help the most deprived. It will also complement our SURE instrument, which provides funding to short-time work schemes – such as Syn-Ergasia, which Greece introduced to compensate employees facing reduced hours, especially in badly hit sectors like manufacturing, transport and tourism.

On a previous trip to Greece, I witnessed the potential of a flourishing startup community. I could see that there are many tech-savvy entrepreneurs offering creative products and services for small companies and innovative apps for tourism.

Our recovery plan will allow Greece to receive considerable funding to stimulate innovation, modernize its economy and reduce vulnerabilities. It will help Greece develop high-impact projects to create a more inclusive, sustainable and digital economy in the long term and to expand into high-value sectors such as ICT, energy, transport or logistics.

Funding could help drive vital reforms like improving the business environment, strengthening the financial system and broadening social protection.

As we emerge from this extraordinary crisis, our proposed recovery plan is Europe’s best chance of success. It sets our path to invest in a fairer, greener and digital future and find new ways to create growth and prosperity.

If EU governments agree to what we have proposed, we will be able to recover faster and invest in a better future. We need to reach agreement on it as quickly as possible, so that Greece and Europe can navigate this storm and come out of it stronger – together.