Recovery Fund: when and how Greece will receive an estimated 30.5 bln euros

With the official submission of the National Recovery and Resilience Plan ‘Greece 2.0’ to the European Commission, Greece stands to benefit from disbursements of up to 30.5 billion euros from the EU Recovery Fund during the coming months. Approval of the Greek plan is effectively considered a given, as the Commission has made it clear that member-states should not submit plans that it will then be required to reject and European Commission President Ursula von der Leyen has already praised the plan in a post on Twitter.

The focus is now on the milestones that Brussels will decide on in order to disburse the funds, starting with a 13 pct tranche (roughly 4.0 billion euros) as soon as the plan is officially approved in mid-summer.

Disbursements can then be made up to twice a year up until 2026, when the Recovery Fund is due to cease operating. The milestones set by the European Commission in the next two months will be binding targets for the progress of reforms and investments foreseen under the plan. As of 2022, disbursement will therefore depend on satisfactory implementation of a group of milestones and targets with respect to the projects and reforms outlined in the plan.

According to the Commission, these will be clear, realistic and verifiable and outlined in legal contracts. Given that the Greek plan includes 106 investment programmes and 67 reforms, as Alternate Finance Minister Theodoros Skylakakis pointed out, this will be a demanding task.

The European Commission will make a recommendation regarding the plan to the European Council, which will then have a month to give its approval. This will include its assessment of the plan based on 11 criteria outlined in the Recovery Fund rules and which chiefly centre on whether:

– it is a balanced reply to the economic and social state of the member-states
– it takes into account the Commission’s recommendations on the policies that a member-state must adopt
– It provides that at least 37 pct of total spending will be directed to meeting climate goals
– It devotes at least 20 pct of total spending on the digital transition
– It helps increase growth potential, job creation and the institutional and social resilience
– It does not significantly harm the environment

In order for the 13 pct advances to be disbursed, the rules of the recovery fund must be ratified by the national parliaments of the 27 EU member-states. The majority have given approval, apart from five, including Germany. There is a high level of confidence in the European Commission, however, that this approval will be given before the national plans are approved.