Greece Plans Post-Recovery Fund Spending Boost, Taps New Funds
Greece faces fiscal challenges in 2027 as the Recovery Fund ends and the Public Investment Program increases. The Finance Ministry plans to address this by considering part of this year's revenue surplus as permanent, allowing increased spending from 2027.
Three new funds, worth over 8 billion euros, will support public and private investments in Greece. These funds, corresponding to half of the Recovery Fund grants for 2026-2032, include the Innovation Fund, the Just Transition Fund, and the InvestEU Fund. The growth rate of expenditure is expected to slow down, peaking at 3.7% in 2025 and decreasing to 3% in 2028.
The government aims for a smooth transition to the post-Recovery Fund era, with increased national financing of the Public Investment Program. Public investment spending is projected to decline from €20.8 billion in 2026 to €11.2 billion in 2028. Greece is advised to capitalize on this year's budget progress to create a new fiscal space for 2027. Two sources of permanent revenue increase have been identified, with negotiations to be closed in 2026 depending on 2025's final results.
The Medium-Term Fiscal Plan projects a peak and subsequent slowdown in the rate of increase in public spending. With the end of the Recovery Fund, Greece looks to new funds and increased national financing to support its Public Investment Program. The government's strategy aims to ensure a smooth transition and continued investment in Greece's future.
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