“Greece 2.0”: a lot of hard work ahead

By Antonis D. Papagiannidis

The self-congratulatory tones abounding in presentations of the National Recovery Plan with which Greece approaches the Next Generation EU/RRF instrument have been fading as of lately.

True enough, European officials have joined in praises to the “Greece 2.0” programme presented by no less than Greek Prime Minister Kyriakos Mitsotakis as an effort that “essentially changes the model of the Greek economy, making it competitive and outward-looking”; even the Financial Times came on board with positive assessments of the Greek efforts to reboot an economy largely based on tourism and informal work on the wake of structural corrosion caused by the coronavirus pandemic.

The promise of an influx of investment, partly through EU grants, to an economy hollowed out and starved of capital following one decade of fiscal austerity and financial dieting dictated by a European tough-love approach to the Greek predicament is too good a promise to miss out on.

Still, elements of skepticism are coming to the surface, starting with the delays in NGEU implementation caused by infighting in EU Member States to the programme’s own financing. The judicial reluctance of the German Bundesverfassungsgericht has been sinking in throughout Europe, since the German brake is causing a wider slow-down in EU-wide ratifications. In Poland, for one, the three-party coalition Government (already split over LGBT rights and social policy) is losing its pace over NGEU ratification. Further tremors are heard from Hungary. French Prime Minister Bruno Le Maire voiced his “deep concern” over NGEU delays, noting that the 2021 growth rate in the U.S. is forecast at 6.4%, while the EU hopes for just 4.4%.

Probable delays in the flow of NGEU funds – originally expected for July/August – is just one part of the story. The potential loss of dynamism and EU-style bureaucratic attitudes in the implementation phase of the RRF operation is more disturbing. This last point is already causing ripples in the Greek set-up: the “Greece 2.0” recovery plan, out of which “an update to the hardware as well as to the software of Greece” is expected, has been formulated by a team/task force headed by Nikos Mantzoufas and Dimitri Skalkos under the supervision of Deputy Minister for Coordination Akis Skertsos, Council of Economic Affairs chairman Michalis Argurou and Greek PM’s own chief economic adviser Alex Patelis. But, as the reality of a programme of 6-years effective duration (2021-27), front-loaded for the first 2-3 years is dawning, on all concerned, more technical issues tend to surface.

Administrative processes that have to do with social initiatives the National Recovery Plan prides itself in (the “software of Greece”), once combined with Brussels bureaucracy, get a daunting stature. The road to decarbonisation of the Greek economy, easy to take when one thinks of closing down lignite-fired power plants, is quite demanding once real subistitutes are sought for their output; the same goes with the effective implementation of the shift to renewables once one goes from goal-setting to action in the field – especially if one frowns upon natural gas for the transition. Also, expectations that the non-grants part of the EU funding of “Greece 2.0” will get matching funds from the private sector with the support of Greek banks – such as they are – amount to exactly that: expectations.

A lot of hard work ahead, now that presentations have been concluded along with self-congratulation.