Greece’s recovery and resilience plan

RRF FUNDED PROJECTS IN GREECE

WHAT’S IN THE PLAN?

The reforms and investment in Greece’s plan are helping it become more sustainable, resilient and better prepared for the challenges and opportunities offered by the green transition and digital transition. Following Council approval of Greece’s plan on 13 July 2021, Greece’s recovery and resilience plan was updated on 8 December 2023 also to introduce a REPowerEU chapter.

^{*This value includes also the part of the plan which is financed with national resources.}

• 103 investment streams and 75 reforms 
• 38.1% of the plan will support climate objectives 
• 22.1% of the plan will foster the digital transition.    

The transformative impact of Greece’s plan is the result of a strong combination of reforms and investment which address the country’s specific challenges. The reforms address bottlenecks to lasting and sustainable growth, while investments accelerate the transition towards a low-carbon, digital and more inclusive economy. In particular, the plan intends to facilitate the decarbonisation of the Greek economy, modernise and digitalise public administration including by improving the tax administration and justice systems, promote the innovation capacity, digital uptake and resilience of key economic sectors, and upgrade health care, education, and active labour market policies.

All measures have to be implemented within a tight time frame, as the Regulation establishing the Recovery and Resilience Facility requires all milestones and targets within the national plans to be completed by August 2026. 

Greece’s plan now includes seven reforms and four investments to reduce its reliance on fossil fuels, in line with one of the REPowerEU Plan's objectives.

To finance this increased ambition, Greece has asked for a share of its Brexit Adjustment Reserve to be transferred to the plan, amounting to €25.6 million. These funds are added to Greece's REPowerEU grant of €768 million.

Key measures for REPowerEU

The reforms aim to facilitate the production of renewable hydrogen and bio-methane, optimise land and sea space usage for the development of renewables, promote energy sharing, energy communities and self-consumption, and introduce new non-grant based financial instruments to further support energy efficiency investments.

The investments aim to support energy efficiency measures, including the installation of solar water heaters and renovations, and the promotion of renewables for self-consumption. Other investments include the scaling up of an existing measure to increase energy storage capacity, pilot projects for bio-methane and renewable hydrogen production, and support for carbon capture and storage infrastructure. Moreover, as regards the additional loans requested by Greece, there is a commitment for financial institutions to invest at least 38.5% of the funds in support for the climate transition.

Together, these measures are expected to reinforce Greece’s ambition to decarbonise the economy by increasing energy efficiency and renewable capacity.

In the area of climate and environmental policies, Greece faces the challenge of increasing the share of renewables in the energy mix, for example through accelerating the development of offshore wind parks, while reducing its long-standing reliance on solid fossil fuels. More investments are also needed to energy upgrade private and public buildings, promote sustainable transport and support water supply management.

Key measures for the green transition

• The revised plan supports the green transition through investments to enhance the energy efficiency for more than 110,000 residences, including for energy-poor households.
• To promote sustainable and multi-modal transport, the plan envisages the deployment of more than 4,500 publicly accessible electric charging points across Greece with overall power capacity of 300 000 kW and 220 electric urban public transport busses in Athens and Thessaloniki, and a comprehensive reform of the railway sector coupled with an important investment for the restoration of the railway network damages caused by the devastating floods in the region of Thessaly.
• Investments in reforestation cover 5,600 hectares and fire prevention actions cover more than 100,000 hectares of forests. Specific investments covering biodiversity, flood mitigation and recovery, and irrigation network upgrades aim to support environmental and nature protection. A  waste management reform  aims to promote sustainable landfilling and waste prevention, reuse and recycling, and a reform in the water sector aims to strengthen the institutional framework and enhance sustainable and rational management of water resources.
• Significant support is allocated towards labour force upskilling through improving green skills that is expected to lead new jobs in the green economy.

The modified plan, including the REPowerEU chapter, has further strengthened the focus of the plan on the green transition, devoting 38.1% of the available funds to measures that support climate objectives (up from 37.5% in the original plan).

Digital challenges for Greece include a shortfall in connectivity, a lack of digital skills (both at basic and advanced level), a slow uptake of digital technologies, in particular by SMEs, and a low level of digital public sector services.

Key measures for the digital transition

• Greece’s recovery and resilience plan supports the digital transition with investments and reforms in the digitalisation of public administration, in connectivity, and in digital skills. 
• Specific investments to support the deployment of fibre optic infrastructure in buildings,  and promoting the integration of digital technologies in SMEs.
• Promote the digital transformation of the education and health system as well as digital upskilling. Such measures are expected to contribute to bridging the digital divide and to reinforce basic digital literacy across the entire population.

The share of digital spending of the revised plan has gone down in relative terms (from 23.3% to 22.1%), however the contribution to the digital transition in absolute terms is increased compared to the original plan adopted in July 2021.

Key macroeconomic challenges for the Greek economy include a high government debt, incomplete external rebalancing and high non-performing loans, in a context of high unemployment and low productivity growth. A high regulatory burden, red tape and a slow and inefficient justice system hamper private investments, weighing on potential growth and employment.

Key measures in reinforcing economic and social resilience

• The plan reinforces economic and social resilience with reforms and investments fostering labour market activation and upskilling, modernising public administration, and simplifying the regulatory framework. 
• €17.7 billion is available in the form of favourable loans to support private investments,  with a significant part of these funds supporting the climate transition and the digital transition. This is complemented by a set of financial sector reforms to address private indebtedness and strengthen capital markets.
• Around €770 million will be invested in redesigning and strengthening active labour market policies to increase full-time employment, including for long-term unemployed and disadvantaged people.
• Significant resources will also be made available to support the creation of more than 23,000 new early childcare places.
• The plan is further strengthened with a number of reforms in key areas:
  • Reform to increase the number of personal doctors and to allow for the full roll-out of the primary healthcare reform are expected to improve access to healthcare services, especially for people leaving in remote areas.
  • Completion of the cadastral mapping is expected to establish clarity on property rights and titles and increase the efficiency of the land registry system.
  • Reform  to improve tax collection and promote electronic payments as well as to strengthen the reporting obligations on the self-employed.
  • The enhanced reform of the financial sector aims to address the debt enforcement process and the non-performing loans’ secondary market.

More information on the event can be found here

Greece’s plan is consistent with relevant country-specific challenges and priorities identified in the European Semester, the annual cycle of coordination and surveillance of the EU’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu)

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