More Money for Greece: Urgent Frontloading Approved

Written by | Wednesday, October 7th, 2015

The European Parliament supported a series of one-off measures aimed at increasing the effective spending of €35 billion for Greece in the EU 2014-2020 budget, which also includes €20 billion from the European structural and investment funds as well as €15 billion from the agricultural budget. The decision followed the recommendation of the Parliament’s regional development committee.

The package is aimed to speed up the EU funding to help Greece use all the money earmarked to it for 2007-2013 budget period before it expires at the end of next year. Thus, Greece should be able to meet the requirements to access all other EU funds in the current budget period of 2014-2020. Currently, the sum of approximately €500 million has been approved to be released as soon as the legislation is adopted and a further €800 million will be available in advance of the formal closure of the programs next year.

Greece will be able to finish projects that started under the 2007-2013 period by removing the requirement for national co-financing thanks to the EU’s 100 percent contribution. Moreover, the country will have the total amount at its disposal, including pre-financing and interim payments. For the new period of 2014-2020, the Parliament has approved an increase of the initial pre-financing level by 7 percent from cohesion policy programs.

Brussels believes that this exception treatment is justified by the current developments in Greece, where the financial crisis negatively affected economic growth and caused major liquidity problems. As a result, public money is especially lacking for investment to kick off growth and employment. The newly approved measures must, however, be still adopted by the Council before they can enter into force. Athens has in the meantime introduced a number of mechanism thanks to which the extra funding available under the 2007-2013 framework will be fully used.

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