Article written by:Andrea Graziano and Johann Maack
European countries have been among the most hit by the health, economic and social crisis brought about by the COVID-19 pandemic. The European Union, through the Multiannual Financial Framework (MFF), the Recovery and Resilience Facility (RRF), and other complementary initiatives, commits a total of €1.8 trillion to sustain the post-pandemic recovery and to improve the long-term prospects of Europe and its citizens. NextGenerationEU (also branded Recovery Fund), which adds €750 billion to the MFF, was agreed upon on 21 July 2020, becoming the largest stimulus package ever financed through the EU budget. By submitting a comprehensive national plan, every Member State is eligible to obtain funds to enhance resilience, mitigate impacts of the crisis, as well as support the green and digital transitions.
European Generation believes in the historical significance of this project, and realizes how big of an opportunity this is. Hence, we believe it is crucial, for all European citizens, to understand what national and European leaders are doing to seize such an opportunity. This is the final aim of this series of articles, which we have entitled “YOU are the Next Generation” as to underline the direct impact the decisions taken in the Recovery and Resilience Plans will have especially on younger generations, as well as the responsibility each and every one of us has in shaping the present and the future of Europe.
The role of Greece within the NextGenerationEU is central both in terms of absolute value of the amounts received, and in relative terms to gross national income. Indeed, Greece will receive approximately €31 billion through the Recovery and Resilience Facility, of which €18.2 billion in grants and €12.7 billion in loans.
In April 2021, Greece published ‘Greece 2.0’, a detailed plan on how the country will use the funds related to the RRF, following the four dimensions outlined by the European Commission: environmental sustainability, productivity, fairness, macroeconomic stability. Greece, like other southern-European countries, suffers from fundamental structural problems in its public and private sector. Thus, the Greek government intends to leverage on the opportunity given by the NextGenerationEU to revitalize the country after a period of economic and social crisis.
The first part of the plan presents the general reforms referring to the main pillars, illustrating their correlation with both the dimensions and the flagship areas of intervention highlighted by the European Commission. Moreover, here is described the coherence with other reforms already adopted by the country, with the country-specific recommendations issued by the European Council, and with the economic policy priorities identified in the European Semester, a multi-annual discussion between the European Commission and Member States to achieve key EU targets.
The second part of the plan explains the reforms and investments in detail, also by specifying the corresponding amount of funds to be dedicated to them. Each pillar of the plan consists of different axes, or components, where each of them is in turn composed of detailed investments. Here follows a qualitative description of the components, grouped into the three broad dimensions of the NGEU.
Sustainability and green transition
The first pillar includes investments aimed at upgrading to a sustainable and green model of growth. For this purpose, the country will deploy approximately 33% of the budget available, distributed across the following components:
Transition to a new environmentally friendly energy model, with the purpose of promoting the green transition, by increasing the share of renewable energy sources in gross final energy consumption and reducing greenhouse gas emissions. The proposed investments also include the promotion of electrical interconnection of the islands and upgrade of the transportation system, the upgrade of the electricity distribution network in forest areas, and the simplification of licensing procedures for investment in renewable energy.
Energy upgrade of the country's building stock, which includes incentives mainly focused on the renovation and energy upgrade of buildings, with the aim of regenerating urban areas, attracting private investment and reducing energy poverty.
Transition to a green and sustainable transport system, which has a double objective. On the one hand, the goal is to coordinate actions aimed at a green, smarter and safer urban mobility. On the other hand, the strengthening of new technologies in the fields of construction, project management, among others, will contribute to the recovery of the Greek economy, by creating new employment opportunities. The main investments include the creation of charging stations for electric vehicles, and the promotion of innovative products and services through financing of research and development departments.
Use of sustainable resources, resilience to climate change and conservation of biodiversity, which includes reforms and investments aimed at a more efficient use of natural resources and the promotion of the circular economy through effective management of waste, the protection of biodiversity, and the adaptation and restoration of the natural environment.
Innovation and digitalization
To the pillar of innovation and digitalization, the plan assigns approximately 12% of the available budget, with the purpose of upgrading public and private infrastructures to a new digital dimension:
Connectivity for citizens, businesses, state, which f