NEWS

Greece to set up task force for aid management

greece-to-set-up-task-force-for-aid-management

The government plans to set up a task force for the utilization of the 32 billion euros that will come to Greece from the Recovery Fund agreed at a summit of European Union leaders in Brussels in the early hours of Tuesday.

The new structure will be created within the Finance or Development ministry.

In absolute numbers, Greece is clearly one of the beneficiaries of the deal as despite the final reductions in grants, Athens essentially received the money that it had banked on from the outset, namely 32 billion euros in total from the Fund, with 12 billion to come from loans and about 19.5 billion from grants. 

If the resources from the multi-annual financial framework –the EU’s upcoming 1.074-trillion-euro seven-year budget – are added to the amount, then Greece in the next seven years will have to manage resources amounting to 70 billion euros which could, under certain conditions, restructure the Greek economy.

The submission and approval of the programs earmarked to absorb 70% of the resources of the Recovery Fund must be made by the end of 2022 and the remaining 30% in 2023. The disbursement of the funds will take place three years later, by the end of 2026.

Prime Minister Kyriakos Mitsotakis pledged on Tuesday that the government will manage the aid with a sense of “prudence and responsibility.” The overall objective, he said, would be Greece’s “productive reconstruction.”

“We finally managed to launch a very ambitious reaction, a reaction that addresses the symmetrical shock caused by the pandemic,” he said.

The Recovery Fund will consist of 390 billion euros in grants and 360 billion euros in loans, which will be financed by a common European debt to be issued by the European Commission.

The Fund eventually retained the full size of the Commission’s original proposal (750 billion euros), but with an increased loan-to-grant ratio.