Greek Economy to Receive Enormous Boost From EU Recovery Plan



 

Bank of Greece Governor Yannis Stournaras. File Photo

The Greek economy will receive a major boost over the coming years from the historic European Union decision to create a recovery fund, titled the “Next Generation EU” plan, agreed upon earlier this month, according to Bank of Greece Governor Yannis Stournaras.

In comments he made to an interviewer on Bloomberg TV on Tuesday, the Greek central banker said that Greece is set to receive 32 billion euros from the EU’s Next Generation plan, a staggering sum that is more than 17 percent of its gross domestic product.

Initial estimates by the central bank are that the funds will lift growth by two percent on average in Greece over the five-year period from 2021 to 2026.

“It was something unexpected,” Stournaras commented. “This is going to have a very positive impact on the economy.”

“We have made certain calculations in the Bank of Greece,” Stournaras said. “For the next six years, the GDP growth rate will be about two percent higher than the number we had up to now. So there’s going to be a revision of growth targets in the years to come.”

He said that key to reaping the benefits of the aid is in just how the enormous windfall of monies will be spent.

The challenge now is to reform the state so that Greece can absorb the funds “in the right way, having the maximum impact on growth,” the governor explained. “It’s not enough to spend the money. We need to accompany this investment with structural reforms,” he stated.