An additional budget of 500-600 million euros is being designated by the government for recovery efforts in the flood-struck central Greece, according to Ekathimerini.
According to Finance Ministry sources, the exact amount will be determined once authorities have a clearer picture of the extent of the damage. This will dictate how much money will be needed in the immediate future for initial compensation claims and damage repair.
The target for Greece to maintain a primary budget surplus of 0.7% of gross domestic product (GDP) this year, as agreed under the Stability Program with creditors in April, will play a significant role in shaping the country’s economic outlook.
Despite the temporary setback caused by storm Daniel, which brought the surplus down from 1% to 0.7% of GDP, Greece aims to maintain this target.
Additionally, EU President Ursula von der Leyen announced on Tuesday that Greece has access to unused European funds worth €250 million from the 2014-2020 Partnership Agreement. These funds can provide further support in achieving the budget surplus target and contribute to Greece’s economic stability.
With regards to the funding Greece can expect from the EU to help with the massive recovery effort that lies ahead following von der Leyen’s announcements on Tuesday after her meeting in Strasbourg with Greek Prime Minister Kyrakos Mitsotakis, government sources clarified the breakdown of the funding:
1. €250 million from the 2014-2020 Partnership Agreement: These funds were originally allocated for other purposes but could not be absorbed and will now be disbursed by the end of the year. This can be considered as additional funding from the EU.
2. Some €500 million from reorganising the priorities of the Recovery Fund: This funding will be redirected towards infrastructure restoration projects in central Greece. While not technically additional funding, it represents a reallocation of resources to support the recovery effort.
3. Around €1.5 billion from the new Partnership Agreement for 2021-2027: These funds will be drawn from the new agreement, which is in its early stages after a redistribution of resources. Similar to the previous point, this represents a redirection of funds rather than additional funding.
Von der Leyen also spoke of Greece’s ability to mobilise Common Agricultural Policy fund reserves and from the 2024 Solidarity Fund that can provide up to €400 million. According to a Finance Ministry Source, Greece can draw at least €100 from that source, which will also be additional funding.