Greece welcomes EC package proposal

Recovery fund to tackle pandemic impact could yield country 32 bln euros in grants, loans

Greece yesterday welcomed a plan proposed by the European Commission to disburse 750 billion euros in grants and loans to European Union countries to help them recover from the economic impact of the coronavirus.

Under the proposal, Greece is expected to receive 32 billion euros from the new recovery fund over three years – 22.5 billion in grants and 9.4 billion in loans.

The total amount is equivalent to almost 1/6 of the country’s gross domestic product in 2019.

“We welcome the Commission’s bold proposal for a package of €750 billion, mainly in the form of grants funded via joint debt issuance. The bar has been set high. Now it’s up to the EU Council to rise to the occasion,” Prime Minister Kyriakos Mitsotakis said on his official Twitter account after the relevant announcement was made by Commission President Ursula von der Leyen.

Soon after, government spokesman Stelios Petsas noted that the EC’s proposals met the four basic conditions that Greece had set for the package from the outset. Namely, that it must be large and ambitious, that it be flexible, that it rely more on grants and less on loans, and that it be financed by common European borrowing. Greece is one of the countries that benefits the most from the European Commission’s proposals, as it is fifth out of 27 member-states in terms of the amount of funding it receives.

However, yesterday’s proposal was not a given and it was preceded by a fervent mobilization by Mitsotakis and a group of his close associates over the past two months.

As Kathimerini reported last Sunday, in the final phase before yesterday’s announcements, Mitsotakis had direct contact with the head of the Commission.

In fact, they communicated twice. Once at the beginning of last week and again last weekend. He reportedly did not enter into a negotiation process, but sought to convey the message that the support package must factor in the credibility that Greece has won in managing the pandemic, as well as the blow sustained by its tourism and shipping sectors, which are a huge part of Greece’s GDP.

The Commission itself predicted a deep recession for the Greek economy of 9.7%.

Additional criteria that Brussels reportedly took into account included the burden Greece is carrying due to the migration crisis.