EU Commissioner Dombrovskis to “N”: The Recovery and Resilience Facility is finalizing in August

Greece has a four-month deadline—until the extremity of August—to conscionable the milestones and backing targets under the Recovery and Resilience Facility, arsenic nary hold will beryllium granted, European Commissioner for Economy, Productivity, Implementation and Simplification Valdis Dombrovskis stressed successful an exclusive interrogation with Naftemporiki.

“At this stage of the multiannual framework, we are seeing accrued deployment of cohesion argumentation funding,” helium explained. The Latvian Commissioner was interviewed connected the sidelines of the Delphi Economic Forum XI, where helium was among the cardinal invited speakers, fixed his work for ensuring accordant implementation of fiscal rules crossed EU Member States under the Stability and Growth Pact.

Dombrovskis noted that “the Greek system is successful bully shape, with maturation exceeding EU mean maturation rates, a strong fiscal position, a fund surplus, and a rapidly declining debt-to-GDP ratio. Of course, it is important to stay connected this way and physique connected these achievements.” Asked whether there is immoderate information of relaxing the strict Stability and Growth Pact, helium stressed that “the wide flight clause exists lone successful the lawsuit of a terrible economical downturn successful the EU oregon the euro country arsenic a whole. At present, we are not successful that scenario. We are successful a situation of economical slowdown, but not downturn.”

He acknowledged, however, that a antagonistic economical interaction connected the European system is expected, ranging betwixt 0.2 and 0.6 percent points, alongside an summation successful mean ostentation that could transcend 1 percent point, perchance resulting successful a stagflationary daze to the economy.

Regarding the vigor situation and support measures for households and businesses, Dombrovskis reiterated the Commission’s proposal that measures should stay temporary and targeted, focusing support connected the astir vulnerable households and the astir affected industries.

The afloat interrogation to Michalis Psilos follows:

-There person been two months since the outbreak of the struggle successful the Gulf, and its consequences are already evident for some the European and Greek economies.

“Indeed, we person estimated the imaginable economical interaction of the struggle successful the Middle East connected the European economy.

This conflict, on with the blockade of the Strait of Hormuz, is generating important effects, arsenic it represents an outer vigor supply daze that we are facing. Energy prices are astatine peculiarly precocious levels, and there is, of course, sizeable uncertainty. The economical interaction will beryllium connected the duration of the struggle and the magnitude of the terms shock.

We person estimated what this could mean for the European economy, under antithetic scenarios regarding however agelong the struggle lasts and however terrible the vigor terms daze becomes.

We expect a antagonistic economical interaction connected the European system successful the scope of 0.2-0.6 percent points of GDP, alongside an summation successful inflation, depending connected the scenario, which could transcend 1 percent point.”

-So, successful a sense,  we are facing a stagflationary daze for the economy.

“To compare, earlier the war successful Iran, our estimates for the maturation of the European Union was 1.5%, some this year and adjacent year. We will update our economical projections successful the 2nd fractional of May, and by then we will apt person a clearer representation of developments—whether there will beryllium de-escalation regarding Iran, and whether the Strait of Hormuz will person safely reopened. Based connected the available data, we will beryllium capable to marque a caller economical forecast.”

We are talking astir the deepest vigor situation successful 50 years, I assume. What measures has the Commission adopted based connected these developments?

“First of all, what we are seeing is erstwhile again volatility successful fossil substance prices, already since 2022, during the erstwhile vigor crisis…”

With the Russian invasion?

“Exactly—following Russia’s penetration of Ukraine, we had already taken measures to strengthen our resilience. We present person a higher stock of renewables, amended interconnections, and greater capableness for alternate supplies. As a result, we are much resilient today successful absorbing this vigor shock. At the aforesaid time, it is wide that a argumentation effect is required, chiefly successful the vigor sector. This week, the European Commission published a study titled ‘Accelerate EU’, which outlines our response.

There are respective measures, including coordinated merchandise of lipid reserves to maximize the affirmative impact, further integration of vigor grid interconnections, and a temporary state assistance model allowing Member States to support the astir affected industries.

However, successful terms of a broader argumentation response, our proposal is that measures should stay temporary and targeted. Support should besides absorption connected the astir vulnerable households and the astir affected industries.”

Greek Prime Minister Kyriakos Mitsotakis has stressed that Europe needs a “plan B” if the situation spreads. How bash you view this?

“It is wide that we indispensable show the situation very intimately and respond arsenic necessary. In that sense, we acceptable the parameters of the existent situation and the due situation response. I would accidental that the advice we springiness arsenic the European Commission to EU Member States is besides mostly aligned with that of the International Monetary Fund to the broader planetary community. However, if the situation deteriorates, further measures whitethorn of people beryllium required.”

The Recovery and Resilience Facility enabled Greece to concern investments and programs that supported growth. The Facility will beryllium finalized successful 4 months, and the question is whether there will beryllium immoderate different financing instrumentality to regenerate it.

“Indeed, the Recovery and Resilience Facility is finalizing this year. All milestones and targets person to beryllium met by the extremity of August, and each outgo requests indispensable beryllium submitted by the extremity of September.

By the extremity of December, the Commission’s mandate to get from the markets for the purposes of this programme will besides end. So the programme will travel to an extremity this year.

It is, however, affirmative that we are presently astatine a stage successful the multiannual model where we are seeing accrued momentum successful cohesion argumentation funding.

Negotiations connected the adjacent Multiannual Financial Framework for 2028–2034 are already underway. Greece has so acold received astir 25 cardinal euros under the Recovery and Resilience Facility, corresponding to 68.3% of its total allocated grants.

The authorities is preparing its adjacent steps for the submission of the 8th and 9th outgo requests by the extremity of August.

In August, the 8th petition for loans will beryllium submitted upon completion of 10 milestones, on with the 9th petition for grants, which requires the fulfilment of 133 milestones and targets—a grounds number.

By August 31, Greece indispensable person met each 294 milestones and targets. The advancement of the outgo requests will beryllium assessed against a total of 177 milestones that indispensable beryllium completed by the extremity of August.”

You person intelligibly discussed each of this with Prime Minister Kyriakos Mitsotakis during your gathering successful Athens, arsenic well arsenic with Finance Minister Kyriakos Pierrakakis successful Delphi. What is your connection to the authorities regarding the state of the Greek economy?

“Yes, I met with Prime Minister Mitsotakis astatine the Maximos Mansion and twice with Finance Minister Kyriakos Pierrakakis. The connection is that, overall, the Greek system is successful bully shape, with maturation exceeding the EU average, a strong fiscal position, a fund surplus, and a rapidly declining debt-to-GDP ratio.

There has so been a notable recovery. Of course, it is important to stay connected this way and physique connected these achievements.

Greece has besides made very effectual use of the Recovery and Resilience Facility funds for investments, arsenic well arsenic for advancing its betterment agenda. It has been a very successful development, and it is important to proceed gathering connected it.”

Commissioner Dombrovskis, arsenic we reason this interview, whitethorn I inquire whether you are optimistic astir the outlook for the Greek economy?

“Yes. Greece is surely performing importantly amended than galore different European countries astatine the moment.”

Fuel terms volatility

Valdis Dombrovskis besides serves arsenic Commissioner for Implementation and Simplification. His mandate is so to trim the administrative load connected some citizens and businesses, and to guarantee that EU rules are amended implemented and enforced.

So what is helium doing successful the discourse of these responsibilities? Speaking alongside Finance Minister and Eurogroup President Kyriakos Pierrakakis astatine the Delphi Forum, Dombrovskis noted that the Commission has acceptable ambitious targets to trim the wide administrative load by 25% for each businesses and by 35% for SMEs. This would translate into yearly administrative outgo savings of astir 37.5 cardinal euros. “We person made a strong start, but we still person a way to spell to scope the 37.5 cardinal euro target.”

“What we are doing,” helium told Naftemporiki, “our strategic objectives—the European Green Deal, decarbonization, reducing dependence connected fossil fuels—are afloat accordant with what we request arsenic a effect to the existent crisis. Because, erstwhile again, the source of the occupation is the volatility of fossil substance prices. The situation today stems from this volatility. Therefore, we should not determination distant from policies that trim our dependence connected fossil fuels. That would beryllium contrary to what we want to achieve.”

Is there immoderate thought astir the relaxing of the stability pact, for example?

“Well, there person been some discussions regarding the activation of the so-called wide flight clause, but it indispensable beryllium said that the wide clause exists lone for a script of a terrible economical downturn successful the EU oregon the euro country arsenic a whole. At present, we are not successful this scenario. We are successful a script of economical slowdown, but not downturn. Fiscal space is limited, which is why we are not moving towards a absorption of broad, untargeted fiscal measures.”