Greek cabinet approves EU-funded stimulus package, sees strong growth growth

ATHENS (Reuters) – Greece’s cabinet on Monday approved a national stimulus package that it hopes will boost economic growth by seven percentage points over the next six years and create tens of thousands of jobs.

FILE PHOTO: Visitors wearing face masks walk past the Parthenon temple atop Acropolis hill, after archaeological sites opened across Greece, following easing of disease measures coronavirus (COVID-19), in Athens, Greece, on March 22, 2021. REUTERS / Louiza Vradi / File photo

As part of the multibillion-euro coronavirus recovery program agreed by European Union leaders last year, Athens is set to secure € 19.4 billion in grants and € 12.7 billion in grants. cheap loans over the next few years, or about 16% of its gross domestic product.

“The national stimulus package could add up to seven percentage points to GDP over a six-year horizon, in addition to the natural growth rate of the Greek economy, and create 200,000 jobs,” Prime Minister Kyriakos said Mitsotakis, calling the plan a “bridge to the post-COVID-19 era”.

Under last year’s EU deal, the European Commission will be allowed to raise up to € 750 billion in capital markets and transfer the money to the member states most affected by the pandemic through payments linked to mutually agreed reform and investment plans, partly in the form of grants and partly in the form of loans.

The Commission expects the first installments of the package to be paid this summer.

The Greek plan will now be debated in parliament before being submitted in its final form to Brussels, before the deadline of the end of April.

A MORE COMPETITIVE ECONOMY

Mitsotakis told ministers the stimulus package could raise nearly 60 billion euros ($ 70.66 billion), adding private sector leverage through equity and loans.

The plan’s four main pillars include projects on green energy, digitization, boosting employment and investment, and reforms to improve education and health, Mitsotakis said.

“It is a unique opportunity to radically change the model of the Greek economy and to lead it towards a more open and competitive model with a more efficient and digitized state and a tax system favorable to growth”, he added. he declares.

More than a third of the plan’s funds will be allocated to the green transition of the economy, renewable energies, electric public transport and the protection of biodiversity.

“This jump will be just the start, the first mile of a marathon that will end when all funds are absorbed by 2026 at the latest,” Mitsotakis said.

Reporting by George Georgiopoulos; Edited by Gareth Jones

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