Greece will get major boost from EU recovery fund, BoG governor says

Greece will get major boost from EU recovery fund, BoG governor says

Greece's economy will get a major boost over the coming years from the historic EU decision on a recovery plan (Next Generation EU) agreed earlier this month, according to Bank of Greece Governor Yannis Stournaras.

In comments made to Bloomberg TV, the Greek central banker said that Greece is going to get 32 billion euros from the EU's Next Generation plan, more than 17 pct of its gross domestic product. Initial estimates by the central bank are that the funds will lift growth by 2 pct on average over the period from 2021 to 2026.

"It was something unexpected," Stournaras said. "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 2 pct 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 how it's 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 said. "It's not enough to spend the money. We need to accompany this investment with structural reforms," he noted.

 

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