Athens may be forced to remove significant but problematic projects that might not be completed within the next 18 months. Decisions will be made by Easter, ahead of the final revision proposal that member states must submit to the European Commission.

Speaking in Athens yesterday (19/2), Declan Costello, Deputy Director-General for Economic and Financial Affairs of the European Commission, acknowledged Greece’s strong performance. However, he made it clear that no extensions would be granted for the Recovery Fund, despite political pressure from many countries that are lagging in fund absorption. This means that if unfinished projects or actions remain pending by July 2026—when the Fund officially closes and member states submit their final reimbursement request—funding will be lost automatically.

Heavy “Axe”

A crucial detail hidden in the “fine print” of the Recovery Fund regulations forces the Ministry of National Economy and Finance to urgently identify projects that could stall at the last minute before the summer of 2026. If any prerequisites remain “up in the air” and are not met in time, not only will the corresponding funding be cut, but the penalty could be even greater, potentially forcing Greece to return funds to the EU!

The positive side, however, is that the government—rather than European institutions—chooses the timeline milestones, giving the Greek side some flexibility to avoid penalties and the looming threat of “sudden death” until the Fund officially closes in July 2026.

Under these circumstances, any delays in the disbursement mechanism are unacceptable. Even though Greece has led the way in the planning and progress of the Recovery Fund since 2021, there has always been an underlying concern about whether the Greek public administration can handle and execute a massive program of 76 reforms and 105 investments within a tight deadline—something central to the “Greece 2.0” plan.

In fact, in 2023, Athens had already conducted an extensive review of Recovery Fund projects, removing or modifying some that seemed unlikely to be completed.

Now, however, with the final revision approaching, the possibility of “sudden death” and project removals cannot be ruled out, as no further extensions will be available.

So far, Athens has completed 240 out of 371 total milestones—nearly two-thirds of the total. This means that around one-third, or roughly 130 critical milestones, still need to be achieved before the program ends.

Out of the €36 billion allocated to Greece through the Recovery Fund, the country has received €18.2 billion so far, covering 51% of the program. With the next disbursement request, total inflows are expected to reach €21.3 billion, pushing the disbursement rate above 59%.

Grant Section

In the grants segment (i.e., funds that Greece receives without having to repay), the goal is to secure every last euro from the remaining €9.6 billion. However, the biggest challenges lie in milestones related to major infrastructure projects such as the E65 motorway or the suburban railway.

Loan Section

In contrast, the absorption rate for loans (which must eventually be repaid to the EU) is significantly lower. However, no one wants to “load” the country and businesses with loans unless there are mature projects with realistic completion and repayment prospects.

So far, only 35%-40% of the available loan funds have been committed—around €3 billion—through 405 signed contracts, with total investment volume reaching €15.36 billion. Of this, €6.7 billion comes from the Recovery Fund, €3.5 billion from businesses’ own capital, and €5.1 billion from bank loans.