How did the Commission assess Greece's second request?
On 30 September 2022, Greece submitted to the Commission a request for the disbursement of nearly €3.6 billion under the Recovery and Resilience Facility (RRF). The request is based on the achievement of the 28 milestones and targets for the second instalment, as outlined in the Council Implementing Decision approving the plan. They cover reforms and investments promoting the use of renewable energy so as to make the electricity market fit for a high share of renewables. They also include re-organising the railways sector to develop, operate and maintain a modern railway network, opening up the public bus transportation market to improve services and to promote a greener bus fleet. Other reforms and investments support the digital transformation of small and medium-sized enterprises (SMEs), as well as interconnecting payment terminals with the tax administration, incentivising green and digital investments by the private sector, encouraging small companies to grow and export, enhancing the supervision of capital markets, creating new funding opportunities for research and encouraging new investments in the tourism, manufacturing and agriculture sectors.
With their request, the Greek authorities provided detailed and comprehensive evidence demonstrating the fulfilment of the 28 milestones and targets. As required by the RRF Regulation, Greece has also confirmed that measures related to previously satisfactorily fulfilled milestones and targets have not been reversed. The Commission has thoroughly assessed this information before endorsing the positive preliminary assessment of the payment request.
What are the next steps?
The Commission has now sent the positive preliminary assessment of Greece's fulfilment of the milestones and targets required for this payment to the Economic and Financial Committee (EFC), asking for its opinion. The EFC's opinion, to be delivered within maximum four weeks, should be taken into account in the Commission's assessment. The Commission will adopt the decision on the disbursement of the financial contribution, in accordance with the examination procedure, through a comitology committee. Following the adoption of this decision by the Commission, the disbursement to Greece would take place. The amounts disbursed to the Member States will be published in the Recovery and Resilience Scoreboard. The Commission has also shared its positive preliminary assessment with the European Parliament.
How do the milestones and targets achieved by Greece under the second payment request effectively support the green transition?
The green transition is supported by energy market reforms, such as a new support scheme for the production of renewable energy which is financially sustainable in the long run, and the introduction of a ‘Guarantee of Origin' trading system, which enables consumers (including businesses) to opt for renewable energy in their individual energy mix. The reforms also establish a ‘Demand Side Response' mechanism, which allows companies to adjust their energy demand in real time depending on the needs of the energy network, and a new energy market monitoring system for the National Regulatory Authority (RAE). Further, the licensing framework for renewable energy sources has been streamlined, and a framework for the licensing of offshore wind parks is now in place.
The green transition is also supported by reforms to promote sustainable transport, such as the reorganisation of the public railway companies and the modernisation of the legal framework for public bus transportation, and through the introduction of tax incentives to strengthen investment by SMEs in equipment for the green transition and their digitisation. Greece's fulfilment of milestones under this second instalment also contribute to the transition to a low-carbon economy thanks to the entry into force of a framework law for an ambitious land rehabilitation programme of Western Macedonia and Megalopolis, Greece's most lignite-affected territories.
The loan facility will also promote private investment in the green transition, with at least 38.5% of the funds disbursed by financial institutions and through InvestEU contributing to the green transition.
How do the milestones and targets achieved by Greece under the second payment request effectively contribute to the digital transition?
The milestones and targets under this second payment request include important measures which contribute to the digital transition, and particularly to the digitalisation of businesses.
Investments include the launch of a support scheme for the digitalisation of SMEs in order to boost the adoption of digital technologies and to support their purchase of digital services and equipment. Investments also cover the launch of a support scheme for SMEs in the industrial sector to deploy smart technologies with a low environmental impact.
Greece's digital transition will also be boosted by a number of reforms carried out under this payment request. These cover the introduction of tax incentives to strengthen investment by SMEs in equipment related to the digitalisation of the green transition, as well as tax incentives to increase the rate of electronic transactions in the economy. Further, a target related to the enhancement of judges' and court clerks' skills, including digital skills
The loan facility will also promote private investment in digitalisation through the commitment to invest at least 20.8% of the funds disbursed by financial institutions and through InvestEU to support the digital transition.
How do the milestones and targets under the second payment request contribute to improving Greece's economic and social situation, and its resilience?
The milestones and targets achieved contribute to the economic and social resilience of Greece as they cover investments and reforms in the areas of skills and social protection, to the business environment, in research and innovation, in the transport sector, public administration, as well as in the domain of tax collection and the fight against smuggling.
Key reforms include the launching of a personal assistance programme for people with disabilities; a new national lifelong learning framework; the interconnecting of payment terminals with tax authorities and the encouraging of electronic transactions; the provision of tax incentives to businesses for green and digital investments, as well as the introduction of a new regulatory framework for the fight against smuggling. They also include incentives to small companies to grow and export, reforms to the Greek railways sector to make it more efficient and responsive to consumers' needs, the enhancement of the supervision of capital markets and the improvement of the framework for attracting strategic investments. As regards tourism, Greece reformed the regulatory framework for the development, licensing and commercial exploitation of tourism facilities to make it more conducive to new investments, thus contributing to the development and resilience of the sector. Further, a new legislative framework is in place aimed at creating new funding opportunities for basic and applied research.
Ambitious investments have also been achieved with this payment request. These concern the launch of calls for support schemes to encourage new investments in industrial parks, manufacturing and agriculture, upgrading infrastructure in research centres and technological institutions, and promoting the deployment of digital technologies by SMEs. Lastly, the loan facility provides a stimulus to private investments related to the green transition, digitalisation, increasing export capacity, economies of scale and innovation.
Does the achievement of these milestones and targets contribute to an effective implementation of the Plan?
The milestones and targets under the second payment request constitute significant steps in the implementation of Greece's recovery and resilience plan, and of the national authorities' broader reform agenda.
In particular, the plan includes measures to support public and private investments with an emphasis on the green and digital transition. These cover subsidy schemes for the digitalisation of SMEs, the upgrading of infrastructure in research centres and technological institutions, and dedicated subsidy schemes to encourage private investments in industrial parks, manufacturing and agriculture.
Further, important reforms are also achieved to attract investments of strategic importance to Greece, promote research and innovation and provide incentives for businesses to upgrade their infrastructure through green and digital investments. Important milestones were also achieved in the area of public transport with the modernisation of the legal framework for public urban and regional passenger bus transportation services.
The milestones and targets achieved also contribute towards the objectives of social and institutional resilience. These concern in particular measures in the areas of lifelong learning and support for people with disabilities, improving tax collection, enhancing the fight against smuggling, upskilling the judiciary and introducing a performance-based reward system for the public administration. In addition, Greece has ensured continuous compliance with the milestone and with its obligations under the Financing and Loan Agreements with respect to commitments related to audits and control.
For More Information
Press release on the positive preliminary assessment of Greece's request for €3.6 billion disbursement
Press release: €4 billion in pre-financing to Greece
Questions and Answers: Greece's €30.5 billion recovery and resilience plan
Factsheet on Greece's recovery and resilience plan
Proposal for a Council Implementing Decision
Annex to the Proposal for a Council Implementing Decision
Recovery and Resilience Facility
Recovery and Resilience Scoreboard
Recovery and Resilience Facility Regulation
Question and Answers on the Recovery and Resilience Facility
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