Delay from Brussels in the first installment from the Recovery Fund

By Tasos Dasopoulos

Towards the end of the month, it seems that the request for the first installment of 4 billion from the Recovery Fund from the end of October, which was originally planned, is being postponed, under the responsibility of Brussels.

Prior to the request, a business agreement between Greece and Brussels on the Recovery Fund must be signed. This agreement is a technical text, based on which the implementation of the milestones of the program will be monitored. Part of this text has not yet come to the Ministry of Finance. Once this is done, Greece will need to “comb” the text for a period of about 15 days before signing it to advance the issue of the installment.

The Ministry of Finance has completed the 15 milestones (most of which are legislation and decisions) related to the disbursement of the installment and is awaiting the business contract. With the current data, the disbursement of the installment to Greece will take 2 months based on the regulation and with more realistic calculations in terms of the schedule of procedures, about three months. Therefore if the request is made at the end of the month, the installment should be expected from the end of February until the beginning of March.

The request for the tranche will be submitted to the Directorate-General for Fiscal Policy, which in turn will have to make a proposal to the Economic and Financial Committee (EFC). The Commission should give its opinion on the request of the Directorate-General. If the opinion is positive, the Directorate-General should submit the request to the EU Budget Directorate to proceed with the disbursement of the tranche.

Until then, the finance ministry, together with the co-responsible ministries, is focusing on including investments and reforms that will cover the total advance of 4 billion euros.

Interventions worth 2.5 billion euros have already been included in the Public Investment program and the goal is to significantly increase this amount by the end of the year. In the next period, the subsidy programs will start, which will help the absorption of the Fund’s resources. In addition to the new savings that will open later this month, there are programs for small and medium enterprises related to digital transformation, the diversification of the tourism product and the agri-food sector.

At the end of the month the start for loans

Meanwhile, the ministry is in the final stages of preparing the framework within which the 12.7 billion-euro loans of the Fund that will finance investments will begin to move. The Ministry of Finance has already signed the EIB 5 billion participation agreement and the EBRD 1 billion euro participation in the Fund financing. It has also sent six invitations to six commercial banks which have accepted and are expected to sign the relevant contracts with the Ministry of Finance by the end of the month. From there, the banks will start accepting – now officially – investment proposals. Those that are evaluated positively will secure financing for 30% of the investment budget and financing from 30% to 50% of the investment from the recovery Fund loans, which come with an interest rate of 0.35%.