Economic analysts are already warning that a sharp break in the flow of resources may create a significant investment gap, particularly for the economies of the European South that were heavily based on the Recovery Fund.
The Recovery and Durability Fund, the 36 billion-euro programme which has largely determined the progress of the Greek economy over the last five years is now entering its final and most critical phase. In fact, today's debate in the cabinet essentially marks the start of the countdown to complete a financial tool that worked as a key lever for growth, investment and market support after the pandemic.
In particular, the Deputy Minister for Economic Affairs and Finance Nikos Papathanasis it presents the road map until the end of the programme, after the submission of the dual disbursement request of EUR 2.6 billion. The amount is EUR 1.4 billion from the 8th grant request and EUR 1.2 billion from the 7th loan component request. At the same time, the government is trying to ensure that the last payments will be completed without loss of resources or financial charges before its final curtain Fund in September.
The critical «sprid» the following 100 days
However, time pressure is now stifling. All project milestones should be completed by 31 August, in order for the final large payment request to be submitted in September totaling EUR 4.8 billion. To do so, ‘but it requires the successful completion of 134 different horizons and reforms.
In detail, the key points of time until the completion of the programme are already fully defined. Thus, as of 25 May, the 8th grant request and the 7th loan payment request were submitted. Meanwhile, based on programming:
On 29 May, the contract of business loans of the TAA is concluded.
The deadline for inclusion in the programmes expires on 31 May. «Home II» and «Upgrade My Home».
On 31 August, the deadline for the implementation of all the definitions is completed.
The final payments are expected by 30 September.
Given these deadlines, the government is aware that any delay or failure can lead to loss of resources or even budgetary fines, as the European framework remains extremely strict. That is why the last line of the Fund is perhaps considered the most difficult since its start.
The difficult transition to «next day»
But behind the technical completion of the programme, does a much bigger question arise concerning the next day and what will follow after the end of the Recovery Fund?
Moreover, in recent years, the Greek economy has been heavily based on the flow of Community resources. From September onwards, the big bet will be to maintain investment dynamics and funding towards business and the real economy.
In this context, the government is already trying to shape a new funding model. A central role is expected to be played by the National Development Programme 2026-2030, a total budget of ECU 16.6 billion. €. Also, during the Greek Presidency of the EU, in the second half of 2027, the negotiations will probably be completed on the funds of the next programming period 2028-2034, with what this entails. In particular, new financial instruments shall be designed through:
- the new National Development Programme 2026-2030,
- the new Social Climate Fund,
- and the next NSRF 2028-2034.
In the meantime, Greek Development BankIn which transferred EUR 2 billion In addition, the Bank will have to provide financial support to the Bank.
However, the transition, only easy, is not specified. Economic analysts are already warning that a sharp break in the flow of resources may create a significant investment gap, particularly for the economies of the European South that were heavily based on the Recovery Fund.
Housing and searching for new tools
It is also indicative of the difficulties of the next period that the debate on the possibility of a «Home 3». Although the Recovery Fund has essentially completed its cycle, the prime minister left open the possibility of a new housing programme, seeking alternative sources of funding either through the NSRF or through new European instruments.
At the same time, more and more analysts point out that the housing problem cannot only be solved by housing purchase subsidies, but requires strengthening the offer of real estate. At the heart is the huge reserve of some 800,000 closed houses, for which new incentives are being considered, such as renovation subsidies, tax exemptions or even interventions in rent increases.
The European battle for the «Second Fund»
At the same time, the debate on the future of the Recovery Fund has already been moved to European level. As the European Union has been approaching the start of the common debt repayment since 2028, the political debate on whether the mechanism will continue.
Greece and France, through Kyriakos Mitsotakis and Emanuel Macrone, openly support the creation of a new permanent European investment tool, a substantial «Second Recovery Fund», which will finance common European priorities such as defence, green transition, artificial intelligence and strategic investment.
The proposal even includes a new issue of Eurobonds or an extension of the repayment of the current debt of the Recovery Fund. However, so-called «feidols» North countries, with Germany foreshadowing, react strongly, rejecting the permanentisation of joint European lending.
The next few months are expected to be decisive for the future of European economic policy and whether Europe will choose a more expansive development strategy or return to budgetary rigour.
Government and opposition in conflict orbit
At the same time, political confrontation inside is intensifying. The government argues that the project is successfully completed, stressing that 100% of the available loan resources are being used and that significant funds are now directed towards small and medium-sized enterprises through the Greek Development Bank.
On the other hand, PASOK accuses the government of ill planning, arguing that investment projects of around EUR 4 billion remain out of funding due to changes in terms and suffocating deadlines. Opposition talks politics «first in – first out», without development criteria and without strategic targeting.
This debate also reflects the biggest stake of the next day, which concerns not only how the funds of the Recovery Fund were used, but especially whether the country managed through them to substantially change its productive model.
