Rush for the first EU loans
The gov’t and banks are concerned as to whether the economy can absorb all the resources
The first batch of European loans from the Recovery and Resilience Fund of Next Generation EU will start being disbursed for the financing of private investments before long, with Greece’s large enterprises working feverishly to prepare and submit investment plans.
Estimates say the first 200 million euros will be released before the end of the year, while the pace will need to be raised as of 2022, upping the target to €5 billion euros per annum so as to meet the strict deadline of the program in 2026.
A vital condition for the promotion of investment projects and the disbursement of loans is the signing of the cooperation framework between the state and the commercial banks, which according to planning will happen by end-September. The framework will practically constitute an open invitation to all commercial lenders for the signing of a business agreement paving the way for the disbursement of loans each time banks turn investment plans into contracts.
Banks assure that the major private projects will be immediately incorporated into the framework, but make no secret of their concerns about the capacity of the economy to absorb the resources available before the deadline. This is €12.7 billion of loans exclusively for private investments – not for working capital – that will require another €12.7 billion as bank funding, and €6.6 billion of participation from the enterprises themselves.
This is added to another €26.7 billion to flow into the country from the 2021-27 Multiannual Financial Framework (known in Greece as ESPA); through a parallel process to that of the Finance Ministry for the activation of the Recovery and Resilience Fund, the Development Ministry is also pushing for the signing within September of the cooperation framework with the European Commission for the start of the new seven-year period’s ESPA subsidies package.
Ahead of this huge sum of cash, the government is also concerned, so it decided last week to set up a committee to monitor the course of financing, record the problems and find solutions for immediate application.