Greece to get 4 billion euros from Europe

The publication of the new assessment of the Greek economy by the Institutions next Tuesday – the first since the exit from enhanced supervision – is set to pave the way for debt relief and an influx of liquidity.

The positive, as expected, report will be accompanied by the last installment from the return of the central banks’ profits from Greek bonds (SMPs and ANFAs) amounting to around 700 million euros. It will also provide for significant debt relief of €5.2bn over time resulting from the cancellation of the 2% interest margin imposed on the 2012 loan by the EFSF.

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By the end of the year, Greece is expected to have funds of around 4 billion euros as in December – in addition to SMPs and ANFAs of around 700 million Euros, the second tranche of 3.56 billion euros from the Recovery Fund is also expected.

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Second tranche from the Recovery Fund

Greece will receive the second tranche from the Recovery Fund. The €3.56 billion includes the subsidies amounting to €1.72 billion and the part of the third tranche of loans amounting to €1.84 billion. Greece successfully completed the 28 milestones of the second tranche and 3 milestones related to the loan part of the third tranche In the 2023 state budget, the economic staff aspires to increase investment by 16%. It is planned to allocate resources amounting to 8.3 billion euros from the Public Investment Program and 5.6 billion euros from the Recovery and Resilience Fund, of which 3.5 billion euros from the grants section, in which to date they have included 372 projects and investments amounting to 13.5 billion euros.

The return of SMPS and ANFAS and the exemption from the interest margin are included in the measures after the exit from the memorandum in 2018 as part of the debt relief. After the exit from the enhanced supervision, in the summer it was decided to give the last outstanding installment under the first evaluation of the simple post-programme supervision.

Basic condition for disbursement

The basic condition for the disbursement of the tranche, around December, is the fulfillment of 22 prerequisites during the period of enhanced supervision, where the evaluation in question took place in mid-October. With this tranche, Greece will have received a total of 5.2 billion euros from profits that the central banks had from the Greek bonds.

Debt reduction is an important goal for the government and the Commission and this improvement is expected to be reflected in the debt sustainability analysis that will be included in the evaluation. According to the autumn forecasts of the European Commission, the debt will fall from 194.5% of GDP in 2021 to 171.1% of GDP in 2022 and to 156.9% in 2024.