Midsummer disbursement of NGEU cash

The approval of Greece’s national recovery plan is expected in the second half of next month, according to the European commissioner for the economy, Paolo Gentiloni, with the disbursement of the first tranche of just over 4 billion euros expected in July, if everything goes according to plan, the Italian official told the 6th Delphi Economic Forum.

Speaking online on the opening day of the event, Gentiloni spoke encouragingly about the Greek blueprint, saying that its initial assessment has been positive and that it is compatible with the four pillars of the Next Generation EU fund.

The Commissioner went on to stress that Greece’s plan is among the most important in the EU, and the fact that Athens will use not only the grants but also the €12.7 billion of loans set aside for Greece to boost private investments, renders the plan even more significant.

So far 14 member-states have submitted their national plans, with Greece second to do so, and – with the exception of two or three countries – all the others are expected to do so by the end of May. Some member-states have not declared an intention to utilize the loans available to them.

Still, Gentiloni appeared somewhat reserved concerning the time of the disbursement in case of delays created in the NGEU project by national parliaments. So far, he said, 19 states have approved it and the other eight are expected to do so by the end of the month. That will allow the European Union to issue debt in June, otherwise it will need to wait until July, which may create difficulties, since that month is a little smaller in trading activity due to market holidays.

He qualified the decision to issue common debt as “unprecedented,” arguing that this is an instrument of solidarity to the countries facing the biggest risk. Convergence in the EU, he said, is a lengthy procedure, and even if the weapon of the NGEU is not enough to achieve it, it would at least reduce the risks.

Gentiloni added that the fiscal rules ought to change and become more appropriate for the new conditions, and warned that the damage the pandemic has wrought on the most vulnerable social groups is deep and will still hurt, while there are sectors that continue to suffer, such as tourism and entertainment.