Greek mainstream media cheer on Tuesday that PM Mitsotakis “got 2.25 billion euros” in EU funds for restoration in the flooded areas of Central Greece. They appear to not have read the small print, the terms and conditions, though.
The European Commission is ready to stand by Greece as it struggles with the aftermath of the recent devastating fires and floods, European Commission President Ursula von der Leyen said on Tuesday, during her meeting with Greek Prime Minister Kyriakos Mitsotakis in Strasbourg.
PM Mitsotakis went to Strasbourg on Tuesday to ask money for the restoration of the flooded-areas in Thessaly and Magnisia because as he said on Sunday, he would want ‘Greek taxpayers to carry the burden.”
After the meeting, the majority of Greek media loyal to New Democracy cheered a big victory forMitsotakis saying that “the EU will fund us with 2.25 billion euros.”
it’s only that the reality is quite different and sober.
The EU funds
Von der Leyen said: “Greece could mobilize up to €2.25 billion in EU funds” and thus from “unspent cohesion money” for forests and agriculture infrastructure as well as submit a request funder the solidarity Fund and consider loans under #NextGenEU.
Greece could mobilise up to €2.25 billion in EU funds.
From unspent and front-loaded cohesion money, ESF , @EUAgri funds.
In addition Greece can submit a request under the Solidarity Fund and consider loans under #NextGenEU. pic.twitter.com/zIyIb4jAZM
— Ursula von der Leyen (@vonderleyen) September 12, 2023
Von the Leyen spoke of five funding streams that could be mobilised to assist Greece with 2.2 billion euros such as funding from the Common Agricultural Policy, unspent money from previous periods, the EU Solidarity Fund and others.
“If we look at those funds, they could, for example, help restore forests or farming infrastructure. A lot needs to be done. Altogether, this could allow Greece to mobilise up to 2.25 billion euros,” Von der Leyen said.
Three financial tools
The three financial tools that will be activated are the following:
1) the NSRF 2014-2020 funds that could not be absorbed for other purposes and will be allocated until 12/31/2023 (estimated at 250 million euros),
2) the re-review of the Recovery Fund with the inclusion of projects amounting to 500 million euros to restore infrastructure
3) the new NSRF 2021-2027 with eligible projects amounting to 1.5 billion euros that will be allocated in the following years.
In this context, the discussion will continue at a technical level in order to allocate the costs of the projects to the eligible financial instruments.
In addition, once the amount of damage is recorded, the country will request additional money from the agricultural reserve and the Solidarity Fund of the European Union, which can allocate up to 400 million euros as of 2024, depending on the amount of the final damage.
“In total, Greece could mobilize up to 2.25 billion euros. In addition, the European Commission is ready to evaluate a Greek request for support from the Solidarity Fund. In this regard, it is important that the member states agree with our proposal to increase the funds of the Solidarity Fund. If this happens next year, we could allocate up to 400 million euros,” the EU Commision President said.
Investments and loans
The aid of 2.2 billion approved by Von der Leyen is in investments and loans.
To make the long story short and clear, according to opposition daily efsyn.gr
From the unallocated funds, most of the financing for the catastrophic floods and the fires, only 400 million euros will be allocated in “hot” money for the compensation of those affected.
The remaining amount (1.85 billion euros) will be allocated to infrastructure projects. European money is nowhere near enough to cover the increased needs.
With unused money of the NSRF [ESPA], the funds that will be given to Greece to deal with the huge needs caused by the fires and floods.
Of the total of 2.25 billion euros to be given to Greece:
400 million euros will be “warm” money from the Solidarity Fund with the final recipient being the affected population.
The remaining 1.85 billion euros will be allocated to infrastructure projects and is money that comes from unallocated EU funds and a part was decided to be disbursed for Greece’s needs.
Note that Greeks roughly estimated the restoration cost for the flooded areas at 7 billion euros. The damages caused by the bg summer fires in Evros and Rhodes is not included.
PS Where will the 5 billion euros come from? PM Mitsotakis has still to answer this. He could cancel the F-35 purchase or demand back the funds allocated -but not properly used – for the restoration and infrastructure projects in Thessaly after Medicane Ianos in 2020.
At the same time, von der Leyen can start calculating the interest rates for the loans.