Today, August 31, marks the formal conclusion of Greece’s Recovery and Resilience Facility. The government is treating the milestone as a triumph, pointing to the full absorption of the 35.95 billion euros allocated to Greece as evidence that the program achieved its purpose.
Behind that narrative, however, lie repeated revisions to Greece 2.0, the national plan built around the Fund; more than 100 instances in which projects, actions or targets were removed or scaled back; substantial cuts to social programs; and investment loans that reached only a limited share of the country’s small and very small businesses.
The contradiction was thrown into sharper relief this week by Deputy Prime Minister Kostis Hatzidakis, who dismissed the criticism by saying the opposition is out of touch and “lives in a different country.” Hatzidakis said Greece will receive the full 35.95 billion euros, made up of 18.22 billion euros in grants and 17.73 billion euros in loans, with the final disbursements completed by the end of 2026.
The question that remains is what, precisely, is being completed, and against which targets, relative to those set when the Fund was originally designed. Also, whether the resources deployed through the program actually altered the productive structure of the Greek economy, a central objective from the outset, is a separate question entirely that needs to be answered.
A steadily lowered bar
The pattern of successive revisions indicates that the government is reaching the finish line with a materially different program than the one it launched. More than 100 projects, actions or targets tied to Greece 2.0 have been either withdrawn from the plan or scaled back, according to figures disclosed over the course of the program. An analysis by the opposition party PASOK found that two thirds of the 195 actions included in Greece 2.0 either had their targets reduced, or were removed from the plan entirely, or both.
Revisions continued as recently as this month. On August 4, the government withdrew a roughly 5 million euro program for preventive health screenings and systematic prenatal testing in remote areas, alongside a 73.6 million euro initiative to expand digital infrastructure in schools. A week later, on August 11, it removed a social reintegration program for recipients of the Minimum Guaranteed Income and for homeless individuals, along with funding earmarked for the archaeological museums of Chios and Argostoli.
Targets that remained in the plan were also frequently reduced. The target number of surgeries planned to clear backlogs for patients on long waiting lists was cut from 34,000 to 20,000. Another example is a residential energy efficiency program originally intended to cover 105,000 homes, which was trimmed first to 83,400, and subsequently to 69,730.
The reduction was more pronounced for businesses. A program funding energy efficiency upgrades for Greek companies, originally intended to reach 9,700 businesses, had its target cut first to 2,600 and then to just 1,060, a decline of nearly 90 percent from the original figure. Rail infrastructure saw similar retrenchment. Planned safety upgrades across 10 tunnels were reduced to six, and a suburban rail project for western Attica was dropped from the Fund altogether.
A 260 million euro reduction in social spending
The cuts weighed most heavily on programs administered by DYPA, Greece’s Public Employment Service, formerly known as OAED prior to a 2022 rebrand.
According to figures released by the Panhellenic Association of OAED Employees, the revised national recovery plan reflects cancellations and reductions totaling at least 260.6 million euros across DYPA programs.
Among them is the outright cancellation of a 106.2 million euro program supporting recipients of the Minimum Guaranteed Income and homeless individuals, together with the removal of a milestone that would had targeted 7,000 beneficiaries. A separate 3.8 million euro program for Roma communities was eliminated in full, while funding for a program supporting individuals on the autism spectrum was reduced by 98 percent, from 4 million euros to just 67,000 euros.
Active labor market programs, which fund job placement and training services, had their target reduced from about 52,000 to 37,600 beneficiaries, meaning 14,400 fewer unemployed people will be reached. The associated budget was cut by 85.7 million euros as a result. Two training subprojects with a combined value of 39.2 million euros were canceled, a program to upgrade the energy efficiency of DYPA’s own buildings was reduced from 118 to 40 properties, and a milestone tied to modernizing the country’s EPAS apprenticeship schools (vocational schools combining classroom training with paid on the job apprenticeships) was ultimately withdrawn from the plan.
DYPA has rejected any connection between these reductions and its purchase of a new building to house its headquarters, maintaining that the two draw on entirely separate funding. In response to zoning objections concerning the building, the agency cites a specific legislative provision and notes that the acquisition has withstood administrative, judicial and fiscal review.
Small businesses largely bypassed by the loan program
A second question that is central to any final assessment of the RRF program is which businesses actually benefited from it.
Survey findings from IME GSEVEE, the Small Enterprises’ Institute of the Hellenic Confederation of Professionals, Craftsmen and Merchants, sit uneasily alongside the government’s account of a program that reshaped the structure of the Greek economy.
Just 6 percent of small, very small and medium sized enterprises report having benefited from the Fund’s investment loans, even though such businesses account for 99 percent of the country’s total. The disparity widens as company size decreases. Only 2.2 percent of businesses with annual turnover below 50,000 euros secured a loan, compared with 13.1 percent of those exceeding 300,000 euros. Among businesses with no employees, the rate falls to 2.4 percent; among those with more than five employees, it rises to 12.4 percent.
More striking still, 89.4 percent of businesses neither received a loan nor applied for one. Of that group, 15.1 percent cited failure to meet bank lending criteria, 14.5 percent said they were unaware the loan program existed, and 7.5 percent said they were deterred by the cost and administrative burden of preparing an investment application.
The government cites separate figures in its defense. Hatzidakis maintains that small and medium sized enterprises received 1.66 billion euros in approved grants, and that 60 percent of the loan program’s signed contracts involved such businesses, financing investment plans worth a combined 5.9 billion euros.
The two figures, however, measure different things. The government’s 60 percent number reflects the share of small and medium sized enterprises among contracts that were signed. The GSEVEE survey’s 6 percent reflects a different measure: the share, across all small, very small and medium sized businesses in Greece, that report having benefited from the loans at all, even though most of them never applied in the first place.
Absorption is not synonymous with success
The Fund’s contribution to specific projects should not be dismissed. The government cites, among other outcomes, the renovation of 80 hospitals and 146 health centers, the delivery of 425 electric buses, the E65 highway, the My Home 2 housing loan program, preventive screening initiatives, a digital labor card system, and the integration of point of sale (POS) systems with cash registers at approximately 490,000 businesses.
The difficulty lies elsewhere: in the government’s effort to equate the absorption of funds with the success of the program as originally conceived.
Securing the full 35.95 billion euros is a genuine achievement in its own right. It does not, however, indicate how many of the original projects were completed as designed, how many targets were lowered to remain achievable within the program’s deadlines, or how broadly the funding ultimately reached the real economy.
There is also an overlooked cost to these revisions. When a project is dropped from the Recovery Fund, it does not simply disappear from the government’s plans; many are instead funded through the National Strategic Reference Framework, known in Greece as ESPA, or through the National Development Program. That redirection comes at a price: projects that were meant to draw on the Fund’s dedicated resources must now compete for financing from other funding sources that are already stretched thin.
That, ultimately, may be the most consequential point absent from the government’s assessment. The Recovery Fund was never conceived merely as a mechanism for transferring 35.95 billion euros from European accounts to Greek ones. It was presented as the country’s principal opportunity to transform its economy and reshape its productive model. Whether it delivered on that promise remains a distinct question from whether the funds were spent.
Source: OT.gr
