The crucial details in the Recovery Fund contract

By Tasos Dasopoulos

The Ministry of Finance and the ministries that implement investments and reforms of the Recovery and Resilience Fund will be under constant control, in order to be able to receive the double installment of the program for 2022.

The business agreement signed between the Ministry of Finance and the Committee on Economic Affairs sets the rules of the game: Greece will have to make a total of four progress reports a year. The first two will be about the overall progress of the program and will be sent on April 15th and October 30th and the other two will be about the progress of the milestones in investments and reforms and should be sent on February 28th and August 31st.

Especially for 2022, the positive outcome of these audits is of particular importance as based on the payment schedule contained in the contract, Greece should receive two installments. The first, which is linked to 13 + 2 milestones of the program, is worth 4.1 billion euros and should have been disbursed normally in 2021. This would have happened if the business contract had been signed in early October to apply. and money to be disbursed these days. This is due to the fact that, according to the Fund regulation, there is a maximum of three months between the request of the Member State and the disbursement of the installment.

In the case of Greece, and after the delay that existed under the responsibility of Brussels, after sending the final texts of the business contract at the end of November, the application for the first installment should be made in early 2022.

At the same time, for next year, the deadlines for the second installment of the program begin to run. The truth is that things in the second tranche are more difficult as Greece will have to complete 28 milestones to get the second tranche of 1.975 billion euros, by June at the latest.

Based on the agreement signed, Greece can apply for payment twice a year: once in the second quarter and once in the fourth quarter. It is obvious that there is no more specific date, as each installment is linked to the implementation of specific milestones that are analyzed in detail in the 400 pages of the text. Therefore, if all goes well, then Greece will be able to make requests for three installments within the next year: The overdue first, second and third installment of the program and will wait for at least two of the total amount of 6 billion euros.

Each annual installment, based on the payment schedule, concerns grants of 3.295 billion and loans of 2.1 billion euros and will be claimed in two applications. In the request of the 2nd quarter, Greece will be able to request 1.975 billion euros of grants and in the 4th quarter another 1.975 billion of grants and 2.1 billion of loans. According to the installment plan, the grants totaling 17.8 billion euros should be disbursed by the end of 2025. If all goes well by mid-2026, Greece will wait for the disbursement of only 2.1 billion of the loans totaling € 12.7 billion secured by the Fund.

A reversal clause for reforms

Another condition of the business agreement is the clause by which the two parties agree that the 68 reforms of the program should be completed as agreed and will not be reversed for any reason. This clause is almost standard. It does not apply only to Greece but is more important for our country as the Greek program includes a large number of critical reforms.

It is also envisaged that Greece will continuously provide all the data that will confirm the reports on the progress of the program and will be in constant contact with the executives of the Commission for live meetings in Athens or Brussels.