The road is open for the financing of private investments through loans from the Next Generation EU fund that could add up to 30 billion euros over the next five years following a European Commission guideline in that direction, ekathimerini.com reports.
The Greek side is satisfied because, according to Brussels’ decision, the resources of the EU fund can be used “in exceptional circumstances” as financing tools – i.e. as credit and not just collateral.
The Commission still prefers the use of the non-funding tools – i.e. the collateral supplied by European entities such as InvestEU. However, Greek Finance Ministry sources say that this new option for exceptional circumstances will satisfy the Greek considerations that Alternate Finance Minister Theodoros Skylakakis presented to the Commission.
This concerns a sum of nearly €13 billion, whose multiplying capacity could leverage a total of €30 billion of investments. The €13 billion in Next Generation EU loans will cover up to 50% of each private investment, supplemented by 30% from bank loans and 20% from own funds.
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There will also be some resources deriving from European institutions such as the European Investment Bank, the European Bank for Reconstruction and Development, and InvestEU, as the Greek recovery blueprint also provides for. The balance between these creditors and the Greek banking system will be determined at negotiations scheduled to be held in the coming days.
“We wish for a sensible balance,” the same sources say. “The loans of the European entities will be alongside those of the Greek credit system.”
Ministry officials expect that the Next Generation EU loans will offset the drawback of the high cost of borrowing Greek enterprises suffer. They note that Greek firms currently borrow at rates 190 basis points higher than their eurozone peers; the near-zero rates of the Next Generation EU fund will bring the cost of borrowing down from 4% to almost 2%, as the fund will cover half of the cost.
RELATED TOPICS: Greece, Greek tourism news, Tourism in Greece, Greek islands, Hotels in Greece, Travel to Greece, Greek destinations, Greek travel market, Greek tourism statistics, Greek tourism report
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