Greek Recovery Fund: MP urges EU prosecutor to keep eyes ‘wide open’

EU Prosecutor Laura Codruța Kövesi, recently criticised by the Greek government for ‘overstepping her mandate’, should keep her “eyes wide open” when it comes to the implementation of the Greek Recovery Fund, in light of a new investigation over alleged fraud, a leading opposition lawmaker told Euractiv.

“The recent attacks by Greek government officials, including the prime minister, against the EU prosecutor is additional proof that EU institutions should keep an eye on Greece’s rule of law,” said Nikos Pappas, former minister and current parliamentarian for the main opposition Syriza party.

The leftist MP explained that there should be no illusions about these invectives as it is a well-known tactic of the New Democracy-led government (EPP).

“By attacking Laura Kövesi, the Greek prime minister either aims to intimidate the Athens-based EU prosecutor’s representatives not to go too far or he knows the EU prosecutor is investigating fraud cases related to the Recovery Fund (RRF) and through the attacks, Mitsotakis attempts to discredit her role,” he said.

Οn 28 March, the Hellenic Competition Commission issued a statement saying it had inspected ten technological companies based in Greece looking into upgrading projects financed by the EU Recovery and Resilience Fund, the Kathimerini newspaper reported.

On Thursday, Politico confirmed the investigation with the involvement of the EU Prosecutor in the case concerning contracts worth about €2.5 billion.

“The EU Prosecutor needs to keep her eyes wide open regarding the implementation of the Greek Recovery Fund”, Pappas said, adding that Syriza had been warning since day one that the current government aimed to share “EU taxpayers’ money with their closest friends”.

SMEs feel excluded

In May 2023, Euractiv revealed that almost €622 million in loans from the Recovery Fund received by Greece by that time had ended up in the hands of a few large companies while SMEs were struggling to get money from the banks.

Read more: More than €600 million Recovery loans in the hands of few Greek businesses

The government admitted the accuracy of the loan data but noted that the next projects would mainly concern small and medium-sized enterprises (SMEs).

It has later denied press reports in Athens suggesting that only large companies benefit from the Recovery Fund and has recently pointed out that €1.5 billion has already been disbursed to small and medium-sized enterprises.

It also said it welcomes any EU investigation as tenders have been approved by the court of auditors.

Pappas still insisted that SMEs are fully excluded from the EU Fund: “Without SMEs – the backbone of the EU economy – the Recovery Fund won’t have tangible results for everyday people.”

The opposition parties noted that most of Greece’s SMEs are small companies employing up to 10 people and stressed that the government’s “1.5 billion euros” narrative essentially refers to companies hiring up to 250 people, which is fairly large for the Greek economy’s standards.

To prove their point, opposition parties have asked the government to provide specific data on how many people are employed in each company that has so far benefited from the Recovery Fund.

Greece’s Recovery Fund totals €31 billion, which will be allocated as grants (€18.4 billion) and loans (€12.7 billion).

The Athens Chamber of Tradesmen recently published a report highlighting the difficulties of SMEs in taking advantage of the Recovery Fund.

“The participation of SMEs, which constitute the backbone of the Greek economy, in the financing mechanism of the RRF is limited. The requirements and conditions of the program act as barriers to supporting their investment activities, and it has become clear that corrective measures and interventions are needed,” the report said.

It added that the exclusion of small banks from the programme, which “in many cases have a more direct relationship with very small businesses and a better understanding of their real needs”, is a restraining factor in the absorption of funds by the latter and a “source of complaints about the conditions of competition between credit institutions”.

Nikos Papathanasis, deputy minister of economy and finance, announced on Thursday €500 million from the loans of the Recovery Fund to provide guarantees for lending to small and medium enterprises.

“This programme will provide guarantees for up to 70% of the requested financing amount,” he said.

[Edited by Zoran Radosavljevic]

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