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EU: Approved Greece's revised recovery and resilience plan including new chapter for REPowerEU
Tuesday 21 November 2023
https://www.amna.gr/eu/article/777494/EE-Enekrine-to-anatheorimeno-schedio-anakampsis-kai-anthektikotitas-tis-Elladas-pou-perilambanei-neo-kefalaio-gia-to-REPowerEU

The revised recovery and resilience plan submitted by Greece, which includes a new chapter for REPowerEU with additional energy-related reforms and investments, has been positively assessed by the European Commission.

The size of the Greek recovery plan now stands at €35.95 billion, with €18.22 billion in Recovery and Resilience Facility (RRF) grants and €17.73 billion in RRF loans. The plan covers 76 reforms and 103 investments.

The REPowerEU chapter consists of seven new reforms and four investments, including the scaling up of an existing investment. These measures will enable Greece to realize RepowerEU's goal of making Europe independent of Russian fossil fuels well before 2030. The measures focus on facilitating the development of more renewable energy sources, including hydrogen and offshore wind, and facilitating the rapid integration of renewable energy into the electricity grid.

In addition, Greece proposed several changes to its original plan. In particular, the amended plan includes four new or strengthened reforms in the areas of primary health care, the fight against tax evasion, property rights and the financial sector. The amended plan also includes four new investments, three of which are supported by the need to take into account the damage caused by the catastrophic fires and floods that hit Greece in August and September 2023.

In particular, Greece decided to redistribute funds to finance two investments in flood protection and erosion control in the Evros and Rhodope areas affected by forest fires. Another investment aims to restore the rail and road networks damaged during the disastrous floods in the Thessaly region last September. The revised plan also includes investment in earthquake prevention to increase infrastructure resilience to natural disasters. These measures are intended to help address the challenges of climate change and complement the civil protection measures already included in the original plan.

The changes proposed by Greece to the original plan are based on the need to consider:

- the downward revision of the maximum grant allocation under the RRF in Greece, from €17.77 billion to €17.43 billion. This downward revision is a result of the June 2022 update of the allocation of RRF grants and reflects Greece's better expected economic performance in 2020 and 2021;

- the objective circumstances preventing the fulfillment of certain measures as originally envisaged, including high inflation affecting in particular the construction sector;

- the request to absorb €5 billion from available RRF loans and integrate €768 million into additional RRF grants under REPowerEU.

In order to finance the increased ambition of its plan, Greece requested that its share of the Brexit Adjustment Reserve (BAR) of EUR 25.6 million be transferred to the plan in accordance with the REPowerEU Regulation. These funds, as well as grants under the MAA and REPowerEU for Greece (amounting to €17.43 billion and €768 million, respectively) and its request for new loans (amounting to €5 billion) , in addition to the loans included in the original plan (amounting to 12.73 billion euros), form the total amount of the modified plan to 35.95 billion euros.

The amended plan maintains a very strong focus on the green transition, allocating 38.1% of the available funds (up from 37.5% in the original plan) to measures supporting climate goals. Regarding the additional loans requested by Greece, the financial institutions commit to invest at least 38.5% of the funds to support the climate transition.

At the same time, the amended plan continues to make a significant contribution to the digital transition in the areas of connectivity, digital public services, human capital and digital skills, the digitalization of businesses and the adoption of advanced digital technologies. While the share of digital spending in the amended plan has decreased in relative terms (from 23.3% to 22.1%), the contribution to the digital transition in absolute terms is increasing compared to the original plan adopted in July 2021.

In particular, part of the additional loans requested by Greece is expected to be used for digital investments in very high capacity broadband networks, digitization of SMEs and large enterprises, development and installation of cyber security technologies, advanced digital technologies and other types of information and communication technology infrastructure ( ICT), in light of the commitment of financial institutions to invest at least 20.8% of funds in such interventions.

The social dimension of the amended plan remains ambitious, with a flagship reform of the primary health care system expected to increase access to health care, reduce inequalities and promote disease prevention.

Additional investments in fire protection, flood protection and anti-erosion infrastructure complementing the civil protection measures in the original plan, as well as new up-skilling programs to integrate refugees into the labor market are also expected to have a positive social impact.

In addition, through the planned investments in energy renovations of residential buildings and in renewable energy sources produced by energy communities, over 60 000 energy poor households are expected to benefit, while through the expansion of energy storage capacities and preliminary inspection of the seismic resistance of buildings of the public sector, Greece's recovery and resilience plan contributes to addressing the country's socio-economic challenges and strengthening Greece's resilience.

The Council now has, as a general rule, four weeks to approve the Commission's assessment. The Council's approval will allow Greece to receive €158.7 million in pre-financing from REPowerEU funds.

Finally, it should be noted that Greece has so far received 11.2 billion euros from MAA funds: pre-financing of 4 billion euros and disbursement of the first two payments of 7.2 billion euros.