Greece will receive a lot of money from the EU for reconstruction and reforms

Athens presented Brussels with a national recovery plan after the coronavirus pandemic. Over the next six years, Greece intends to channel a total investment of € 57 billion with the EU to improve public services, restore network industries, attract capital investment, increase exports and reform key institutions.

Prime Minister Kyriakos Mitsotakis has called the reconstruction plan “a bridge to the post-covid era.” Its implementation will create thousands of jobs and spur economic growth based on a completely new model.

Last year, EU leaders approved a package of measures to overcome the consequences of the pandemic. It provides for the allocation of about 30.5 billion euros to Greece.

According to the Athens plan, 38% of all funds invested will go to green projects and 22% to research and development of the digital economy. A significant share will also go to structural reforms. The money will come not only from the EU, but also from banks and investors.

The plan is considered quite ambitious given the fact that Greece is just beginning to recover from a decade of economic crisis and austerity programs. The recession that hit the country last year reached 8.2% of its GDP. Greece has the highest unemployment rate in the EU. Brussels-based economist Zsolt Darvas looks to the future of this country:

“Most of the money will come in 2023 and beyond. So this is more of a medium-term bailout than an immediate bailout for the Greek economy. At the same time, the plan could give the country a boost. economic recovery, they can start investing their capital right now. Therefore, the recovery phase will be shorter and unemployment reduction will go faster”

An employee of the Bruegel Institute stressed that the financial assistance programs that Athens had to carry out helped her to prepare her plan. Greece will receive a disproportionate amount of money from the European project – almost 20% of its GDP. Many countries have failed to come up with such a big plan. Nevertheless, the planned investments and reforms will not be enough for Greece to play a much more important role in the development of the European economy.

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“Of course, investments in green and digital technologies will increase the competitiveness of the Greek economy and many Greek companies, but ultimately competitiveness is a micro-phenomenon. Firms need to be better organized, the workforce better trained, companies need to quickly seize new opportunities that arise – such fundamental competitiveness factors will not be changed by the new plan”

After the European Commission evaluates the Greek plan, the country could receive the first 13% of the payments due by the end of the summer as pre-funding for recovery efforts from the pandemic.

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