– The plan is ambitious and will build a better future for the Greeks. It will change Greece for decades. Let us use it for future generations, von der Leyen said in Greece, with Prime Minister Kyriakos Mitsotakis present. Athens will receive about 30.5 billion euros, including 17.8 billion euros in direct grants and 12.7 billion euros in loans.
Von der Leyen kicked off her tour of Europe on Wednesday with Portugal and Spain, announcing Brussels’ green light for national reconstruction plans. After Greece, she will travel to Denmark on Thursday afternoon.
AFP notes that after a decade of economic crisis, Greece had hoped to return to strong growth in 2020, but GDP fell by 8.2%. due to the epidemic.
The International Monetary Fund (IMF) expects the Greek economy to grow by 3.3% this year, and in 2022 growth will accelerate to 5.4%. The European Commission expects Greek GDP to grow by 4.1%. This year, 6 percent. in 2022.
See: EC: Green Light for Reconstruction Fund
The European Commission announced on Tuesday that it has started borrowing money from the financial markets for the Reconstruction Fund. The first loan installment covers 20 billion euros.
All EU countries agreed to the Special Resources Decision. As a result, the European Commission was able to start raising funds to finance the reconstruction fund. To this end, the European Commission announced in early June that it will issue in 2021 long-term bonds worth about 80 billion euros, which will be supplemented by short-term European bonds to cover the remaining financing requirements.
A plan based on preliminary estimates
The final amount of EU bonds and eurobonds will depend on the funding needs, which the Commission will assess in more detail in the autumn. In this way, in the second half of the year, the European Commission will be able to finance all planned subsidies and loans to member states under the policies of the Reconstruction Fund and the European Union.
The financing plan is based on preliminary estimates of loan and grant needs for member countries. In September, the Commission will update it, getting a more accurate picture of member states’ financial needs for the final months of this year.
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To finance the Reconstruction Fund, the European Commission, on behalf of the European Union, will borrow up to 750 billion euros in capital markets at 2018 rates. This will translate into an average loan size of about 150 billion euros per year between mid-2021 and the end of 2026 and beyond. After that, making the European Union one of the largest issuers of euro-denominated debt.
In September 2021, the Commission also intends to start issuing EU and Eurobonds through an auction. After launching the auction system, the commission will issue bonds on a regular basis. In addition, regular Eurobon auctions will be organized.
Thanks to the high credit rating of the European Union, the Commission will be able to borrow on concessional terms.
A / PAP