Greece to Get Twice as Much as Seen in 2021 EU Funds
Greece to Get Twice as Much as Expected in 2021 Recovery Funds
(Bloomberg) -- Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.
Greece will get nearly twice as much funding than originally expected this year from the European Union’s Recovery and Resilience Facility, one of the country’s top economic advisers said on Tuesday.
The country will receive some 7.5 billion euros ($9.1 billion) in 2021 from the fund, set up to help offset the economic effects of the pandemic, compared with an original figure of around 4 billion euros, Alex Patelis, Prime Minister Kyriakos Mitsotakis’s chief economic adviser, said at the Athens Stock Exchange’s annual investment forum.
“We now expect some 7.5 billion euros, up from an initial 4 billion euros,” said Patelis at the event, which traditionally takes place in New York but was held virtually this year. That amount is equal to 4% of economic output, he said.
Greece, according to its plan, wants to use 31 billion euros it’s scheduled to get over the course of the program to boost economic recovery. The country lost some 25% of gross domestic product during its decade-long debt crisis and suffered a further 8.2% contraction last year due to the pandemic.
Mitsotakis’s administration forecasts that the economy will grow by 3.6% this year. Output fell 2.3% in the first quarter compared to the same period last year, which the government sees as a positive sign for the whole year.
“For 2021 as a whole, the 3% to 4% growth consensus estimate is too low and we plan to update our official forecast,” Patelis said.
Greek banks, which will have a key role in distributing the EU funds, have stepped up efforts to clean up their balance sheets and eliminate bad loans.
People are realizing that “we can put the financial crisis behind us and that we are becoming a normal country,” Patelis said.
©2021 Bloomberg L.P.