HOUR government submitted a second payment request from Recovery Fundfor a total of €3.65 billion, including loans, earlier than originally planned, as the relevant three preconditions (milestones) have already been met.

As the Deputy Minister of Finance stated at the relevant press conference Theodor Skylakakis, Greece is one of the top five countries that sent a second payment request. However, he spoke of a big problem as the completion time of the program ends in just 4 years, which is the average delay for projects in previous years. It is noted that the country received 17.8 billion euros in grants from the Recovery Fund and 12.7 billion euros in loans. However, he added that “the effective implementation of Greece 2.0, combined with the country’s investment dynamics and high growth rate registered compared to other states are three reasons we believe will keep us out of recession.”

Yesterday’s application for 3.65 billion euros includes 1.72 billion euros for investments and 1.84 billion euros for loans. For its submission, the government fulfilled 28 prerequisites (milestones). Around €7.5 billion has been disbursed to date, including €4 billion in grants and €3.5 billion in loans. The first tranche, paid out on 8 April 2022, amounted to €3.56 billion (€1.72 billion in grants and €1.84 billion in loans). The pre-financing paid out on August 9, 2021 amounted to 3.96 billion euros. Thus, if the second tranche is paid, as expected, 11 billion euros will flow into the state treasury by the end of the year.

Absorption of grants through Public Investment Program so far they reach 1.65 billion euros.

Judging by the data presented yesterday, there is a high interest not only in subsidies, but also in the Fund’s loans, which are secured average interest rate 0.90%with an average maturity of about 10 years.

In addition to Mr. Skilakakis, Minister of State A. Skertsos, Secretary General for Government Coordination T. Kontogeorgis and Commander of the Special Coordination Service of the Reconstruction Fund N. Mantzoufas, with the coordinator of the government representative G. Oikonomu, were present at yesterday’s presentation.

In detail, according to the published data, the progress of Greece 2.0 is as follows:

To date, about 7.5 billion euros have been disbursed, of which 4 billion in the form of grants and 3.5 billion in the form of loans.

At the moment, 372 projects are included with a total budget of 13.5 billion euros. The projects fall under the four pillars of the Plan, namely Green Transition, Digital Transition, Employment – Skills – Social Cohesion and Private Investment and Economic Transformation.

Some of the latest approvals relate to the following projects: energy saving in public buildings (€170,000,000), grid upgrade of the Greek Distribution Grid Operator (DEDDIE) to increase sustainability and protect the environment (€60,000,000), development, construction, launch into orbit and operationalization of small satellites that will support secure communications services (€200,370,480).

150 investment projects have been submitted. Their total budget is about 6.82 billion euros, of which 2.83 billion euros are loans from the Fund, 2.46 billion euros are funds from banks and 1.53 billion euros are funds from investors.

The above investments relate to different sectors of the economy, i.e. industry, telecommunications, energy, transport, tourism, services, trade.

A large number of projects out of 150 submitted investment projects are at the stage of preliminary approval by lending institutions, and 23 investment projects have already been contracted with a total budget of 1.41 billion euros, of which 650 million euros are financed by the Fund.

“We must have ammunition” and for the future

With a primary deficit below the 2% of GDP projected in this year’s Stabilization Program, but also with a surplus below 1% of GDP (versus the 1.1% of GDP projected in the Stability Program), the draft budget will be presented on Monday, the finance minister said yesterday Christos Staikouras.

In his interviews with SKAI and MEGA, Mr. Staikouras made it clear that the fiscal space has been exhausted by the measures announced by the prime minister. He also spoke about two scenarios for the development of the economy. The unfavorable will lead Europe to recession. Against the latter, he said that “you have to be careful and have ammunition. If we don’t take care of our finances, given that the cost of borrowing is high across Europe, we will end up in the situation we have been in lately. Greece, for example, should not have access to markets.” However, he argued that even with a recession in Europe, there is a chance that Greece will not show negative growth rates. He explained that the ECB’s adverse scenario (stress test) predicts a 1% recession and 7% inflation in the euro area in 2023.

Regarding the pressure on the budget from measures taken by the government, he said that out of 13 billion euros, 4 billion euros are covered by the budget, and the rest by the Energy Transition Fund. Of the 1.1 billion euros in electricity subsidies in October, 1 billion will be provided by the Energy Transition Fund and only 100 million euros will fall on the budget.