European Commission approves Greek aid request worth 3.64 bln euros

The European Commission approved three Greek proposals on Tuesday, involving a release of a third payment request of 3.64 billion euros, an extension of a plan to further reduce non-performing bank loans, and a plan to provide 80 million euros in aid for farmers who lost property, animals, and crops during fires and floods.

Positive preliminary assessment of Greece’s 3rd payment request of 3.64 bln

The European Commission endorsed a positive preliminary assessment of Greece’s third payment request of 3.64 billion euros (1.69 bln in grants and 1.95 bln in loans), under the Recovery & Resilience Facility (RRF).

On May 16, Greece submitted to the Commission a payment request for grants, based on the achievement of the 39 milestones and three targets selected in the Council Implementing Decision for the third instalment for grants. On November 22, Greece also submitted a payment request for loans concerning the achievement of one target.

Targets also include a series of reforms to enhance efficiency in public administration, including through establishing a multi-level governance system that will streamline the allocation of responsibilities between central, regional and local authorities, and to enhance the fight against corruption and smuggling.

Other reforms include addressing weaknesses in urban planning, promoting the upskilling for employees and the unemployed, and establishing a regulatory authority to enable a more rational and effective waste management system and more sustainable management of water resources. Also, introducing fair and transparent procurement for public urban and regional passenger transportation services and improve the regulatory framework for industrial parks.

The one target covered by the payment request for loans required the signature of at least 3.5 billion euros of RRF loans between financial institutions and companies to support private investment related to the green transition, digitalisation, increasing export capacity, economies of scale and innovation.

Approval of reintroduction of ‘Hercules’ scheme to reduce Greek banks’ NPLs

The European Commission has approved the reintroduction of a Greek scheme, known as ‘Hercules’, aimed at supporting the reduction of non-performing loans of Greek banks, as it does not involve State aid, the European insitution announced on Tuesday.

Commissioner in charge of competition policy Didier Reynders noted that the Hercules scheme “has already successfully contributed to the lifting of the burden of non-performing loans from the balance sheets of Greek banks,” and that its reintroduction “will now enable Greece to provide further market conform guarantees that do not distort competition.”

In turn, he added, this will allow Greek banks to concentrate on contributing to the growth of the Greek economy. The scheme is a re-introduction of a measure that the Commission initially approved in October 2019 for a duration of 18 months and prolonged in April 2021, which expired on October 9, 2022. Greece notified its plans to re-introduce the scheme, which will run until the end of December 2024.

Approval of 80 mln Greek state aid for natural disaster damage in agricultural sector

The European Commission has approved, under EU State aid rules, an 80-million-euro Greek scheme to compensate damages from natural disasters and adverse climatic events in the agricultural sector, it was announced also on Tuesday.

The scheme is aimed at supporting farmers who have sustained damage to their crop and livestock production or to their fixed assets, stored products and production equipment due to unforeseen events.

Such unforeseen events include natural disasters such as earthquakes, landslides, floods, avalanches, tornadoes, volcanic eruptions, Mediterranean cyclones and wildfires. This also includes adverse climatic events which can be assimilated to a natural disaster, such as storms, hail, ice, windstorm, heavy or prolonged rainfall, high temperatures, snowfall and severe drought.

Under the scheme, which will run until December 31, 2027, the aid will take the form of direct grants. The maximum amount of aid per beneficiary is 200,000 euros.