Greece falls behind its targets for post-Covid EU recovery money

Greece is lagging badly behind in meeting its milestones for receiving money from Europe’s post-Covid fund (or Recovery and Resilience Facility, RRF), which was launched in 2021. Seventeen months before the final deadline, Greek projects remain mired in severe delays. The risk is growing that EU money will be left on the table.

Greece’s national plan, known as “Greece 2.0”, totals €35.95 billion, of which €18.22 billion is in grants and €17.73 billion in loans. The government has chosen to distribute the latter through the traditional banking system at the minimum interest rates set by the RRF (0.35% for small firms; 1% for medium and large ones).

The programme includes 105 investments and 77 reforms. Their implementation is tracked by 381 milestones and targets. Disbursement of the balance depends on progress being achieved.

Major delays

According to the EU directive that set up the fund, the final milestones and targets (for both investment projects and reforms) come due on 31 August 2026, and any payments to member states must be completed by 31 December 2026.

As of the end of 2024, the receipts of Greece 2.0 amounted to €18.2 billion (€8.59 billion in grants and €9.62 billion in loans, according to the introductory report of the 2025 budget).

Based on these facts, and with the deadlines approaching, it is clear that things are not going as planned. One indication is that in the original version of the programme (before its revision in December 2023) it was planned that the first 7 tranches (i.e. 64% of the total grants and loans available to Greece), would have been disbursed by the end of 2024. In fact, by that date only 4 tranches had been disbursed, representing 50% of the total resources available.

This problem does not concern Greece alone. The European Commission, in its latest annual report on the RRF, records low spending rates in other countries as well. By the summer of 2024, only 40% of the funds had been distributed to the member states. This had increased to 47% in February 2025 – exactly 4 years after the official launch of the facility in 2021. Of the total €650 billion available, much therefore has yet to be disbursed.

The proximate reason is clear: delays in the implementation of projects and in the achievement of milestones and targets.

Causes

In January 2025, Greece’s Court of Auditors published a report on the implementation and progress of the national plan. The audit revealed major delays in the projects. That may lead to a backlog of project work, to be completed at the end of the RRF’s mandate, with a risk of inefficient spending of resources and irregularities. Or it may result in a straightforward loss of the EU money.

The European Court of Auditors attempted to explain the delays by referring to a survey of the national coordinating bodies in Spain, Italy, Slovakia and Romania. According to the reports from those countries, the reasons can be summarised as follows:

• 1. Changes in external conditions;
• 2. Underestimation of the time needed for implementation when designing national projects;
• 3. Problems related to public procurement;
• 4. Application of state-aid rules;
• 5. Administrative problems and insufficient management capacity;
• 6. Complexity of national procedures.  

In the case of Greece in particular, Panagiotis Korkolis, director of the Institute for Policy Alternatives (ENA), attributes the delays to “pathologies in both the public and private sectors. The problem lies in the way they operate, as well as in the structure of the public sector in Greece. A typical example is the Contract 717, related to the railway accident in Tempi. The contract took 10 years to complete, with tragic consequences.”

He concludes that a large part of the RRF projects “risk being similarly delayed due to the same pathologies”.

The risk of waste and abuse

On 10 March, the European Court of Auditors published a new special report. It points out that in some EU countries there are significant weaknesses in the procedures to ensure legality and transparency in the management of RRF funds, and that the European Commission’s own auditing has gaps in its coverage. The risk is that recovery funds may be used to finance measures that have not been rigorously checked for their compliance with rules on public procurement and state aid.

The ECA’s warning bell is especially relevant for Greece. In case of serious infringements due to inadequate controls, the result might be further delays and thus a loss of funding.

Far behind the milestones

At the same time, as of February 2025, out of a total of 381 milestones and targets, Greece had met only 107, i.e. 28% (the data cut-off is 9 January 2025). Only 17 months remain before the expiry of the RRF’s deadlines (August 2026). The programme was launched in February 2021.

The seriousness of the situation was noted in an exchange on the subject on 10 February 2025 between the European Parliament and the Commission. As the document observes:

“What is striking is that, with the exception of Italy, the largest recipients of RRF resources (either as a percentage of national GDP or in per-capita terms) do not seem to perform as well in meeting milestones and targets, compared to the absorption of funds. For example, Greece and Portugal have received more than half of their allocations, yet neither country has achieved even one third of the milestones and targets included in their plan.”

A multifaceted problem

According to a study published by ENA in December 2024, Greece’s plan has one overriding problem: there is a major discrepancy between the total sums received by Greece and the actual payments to final beneficiaries. This makes the absorption of the funds much lower even than the official figure (of around half the total fund disbursed).

As the report notes, although €18 billion have flowed into the country, total spending up to 30 October 2024 was estimated at only €12 billion. Up to €6 billion is considered to be dormant – i.e. it is sitting unspent in the Treasury’s account at the Bank of Greece.

However, even the €12 billion of nominative expenditure includes transfers between the accounts of various government agencies at the Bank of Greece, rather than actual payments to the final beneficiaries who implement projects. It is the latter that constitutes liquidity for the real economy and a contribution to GDP. These payments currently amount to €7.1 billion, representing an actual absorption rate of a meagre 20%.

The Commission has tended to focus mainly on its own disbursements to national governments. However, what matters is when these funds reach the final beneficiaries, and it is precisely “at this last stage where the problem is observed”, points out Jérôme Creel, an economist at the French Economic Observatory (OFCE), a think tank.

Simply put, the delays are occurring at two levels: both in disbursements from Brussels to member states and in the distribution of funds from national governments to final beneficiaries.

€3.7 billion to 20 companies makes up almost half of Greece’s recovery money

In Greece there is another problem: that of a distorted allocation of funds. From the outset, the government has directed its post-Covid recovery money mainly to large organisations and firms, thus neglecting small and medium-sized ones. Yet SMEs do not otherwise have the same access to loans as the corporate giants.

According to an announcement by the coordinating department at Greece’s Ministry of National Economy and Finance, out of a total of 330 contracted loans, 166 are to SMEs, with a total budget approaching €2 billion.

However, the list of the top 100 recipients of RRF funding, sharing a total of €16.13 billion, shows that most of the Greece 2.0 loans were made out to a few large corporations. They have rushed to take advantage of the RRF’s low interest rate, despite the fact that they already have easy access to credit.

A noteworthy statistic is that the top 20 companies on the list have received more than €3.7 billion from the RRF, mainly through loans.

In fact, the list of the 100 largest recipients reveals that there are fewer final beneficiaries of the RRF than there are projects and loans. Many of the entities are companies controlled by the same shareholders.

For example, the PPC Group (the largest electricity producer and supplier in Greece) is the largest private recipient of RRF funds, with loans and grants totalling €1.3 billion. The various projects are undertaken by subsidiaries of this group (DEDDEO, Dei Optical Communications, Phoebe Energy, SolarLab, etc.).

The second largest beneficiary is the GEK TERNA Group (active in construction, energy, mining and real estate). It has received €380 million for a pumped-storage project in Amfilochia (Terna Energy) and for a fibre-optic project (Terna Fiber).

The third largest beneficiary is the ADMIE Group (operator of the Greek electricity transmission system), which has received €303 million.

The list of 100 beneficiaries naturally includes government ministries. Their grants for various projects and programmes total €8.2 billion, representing 23% of the total sum available to Greece. The largest such recipient is the Ministry of Environment and Energy.

What will happen to the unspent money?

If the delays are not addressed by the end of the RRF’s mandate, as seems most likely based on the current performance of member states, what will happen to the unspent funds?

One possibility is that they will simply be forfeited. This would reduce the total final value of the RRF.

“In order to limit the losses, the Commission hopes that the unused amounts that are not paid to states will be mainly loans rather than grants”, explains Eulalia Rubio, a researcher at the Jacques Delors Institute in France. However, there is no guarantee of this.

One scenario examined by the European Commission in mid-February is the possible reallocation of unallocated funds to defence, and in particular to ReArmEurope, the €800 billion European arms programme. Panagiotis Korkolis, of ENA, mentions another scenario: “What is being discussed in Brussels is to transfer the unallocated funds to the European Investment Bank, which would be responsible for channelling them to projects in the member states that failed to absorb the RRF funds.”

This would amount to an indirect extension of the RRF. A direct extension of the RRF itself has been ruled out by Commission leaders.

UPDATE: Following the first publication of this investigation (19/03), the European Commission issued a positive preliminary assessment of Greece’s payment request of €3.1 billion (the 5th instalment). The Commission confirms that Greece has met the required milestones and targets for this payment. This will increase the overall completion rate from 28% to 35% when the assessment is finalised, but still leaves Greece far behind on the RRF’s scoreboard, with only a third of milestones fulfilled.

This transnational data survey was carried out in the framework of the European Data Journalism Journalism Network (EDJNet).

The survey was coordinated by Alternatives Economiques (France), with the participation of Openpolis (Italy), HVG (Hungary) and MIIR (Greece).

Translated by Voxeurop