Greece Set to Submit Plan to Brussels for Use of EU Crisis Funds
(Bloomberg) -- Greece on Tuesday will present the European Commission -- the European Union’s executive branch -- with its proposals for using the bloc’s crisis funds to combat the effects of the pandemic, a government spokeswoman said.
The Greek plan will focus on four areas: digital transition; employment, training, and social cohesion; the green economy; and boosting investment.
“The plan consists of both reforms and investments,” Alex Patelis, chief economic adviser to Prime Minister Kyriakos Mitsotakis said in a newsletter.
Along with Bulgaria, Greece will be one the two largest benefactors on a per capita basis. Greece suffered from high unemployment and sluggish gross domestic product relative to peers even before the pandemic, and it today has a wide investment gap and an economy skewed toward services, notably tourism, with relatively high past absorption rates for EU funds, S&P Global ratings said in a report Tuesday.
The government estimates the program could create around 200,000 new jobs. While unemployment fell to 16.3% in 2020 from a crisis peak of around 30%, it remains the highest in Europe.
“It’s a gigantic program that has potential to mobilize around 57 billion euros ($69 billion),” with 32 billion euros in secured funds and grants from the recovery fund and 25 billion euros from the private sector, Mitsotakis said in March.
Growth in Greece could expand a cumulative 18.3% by 2026, as a percentage of 2020 economic output, under a high-impact scenario and by 8.3% under a low impact scenario, S&P said.
The plan sets aside some 6 billion euros for so-called green transition, including new energy storage capacity, the interconnection of the Cycladic Islands and reforms of licensing procedures for alternative energy sources.
Greece is also earmarking some 224 million euros to reduce pollution and 565 million euros for digitalization in justice, health, education, immigration, environment and energy.
Over 1 billion euros will go toward reforms and investments to develop a mechanism for diagnosing labor market requirements.
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