Daily Update


28-05-2020 | EYE ON GREECE 

Thursday, May 28 2020

Repair and Prepare: EU unveils 750 bln euro plan for coronavirus recovery

The European Commission unveiled on Wednesday a plan to borrow on the market and then disburse to EU countries 750 billion euros in grants and loans to help them recover from their coronavirus slump, giving an immediate boost to the euro.


Greece to get 32 bln euros, according to EU Commission proposal

Greece will get 32 billion euros of the new recovery fund, of which 22.5 billion would be grants and 9.4 billion would be loans.


PM Mitsotakis welcomes European Commission aid proposal for coronavirus fallout

Greek Prime Minister Kyriakos Mitsotakis welcomed the European Commission’s proposal for a 750 bln euro aid package to fight the economic repercussions of the Covid-19 pandemic in Europe, announced Wednesday.


State Dept official Matthew Palmer: US working consistently on reducing Greek-Turkish tensions

The United States is working consistently to reduce tensions in Greek-Turkish relations, US Deputy Assistant Secretary for European and Eurasian Affairs Matthew Palmer said on Wednesday.


‘Fence will be built,’ minister says during Evros visit

Citizens’ Protection Minister Michalis Chrysochoidis on Wednesday stressed that Greece intends to proceed with plans to extend its fence at the Greek-Turkish border in Evros to prevent a mass influx of undocumented migrants trying to reach the European Union.


Covid-19 outbreak: No new related fatalities reported in Greece on Wed.

The SARS-CoV-2 death toll remained the same in Greece over the past 24 hours, at 173, while a spike was reported in the number of confirmed coronavirus infections, with 18 new cases cited.


ATHEX: Stocks leap on reports from Brussels

The European Commission announcements concerning grants and loans for member-states adding up to 750 million euros gave Greek stocks a major boost on Wednesday, in line with most other European bourses. The fourth consecutive day of gains on the highest turnover of the last two-and-a-half months took the benchmark over 8.5% higher compared to last Thursday’s closing.







KATHIMERINI:   The 32-billion-euro package is a great opportunity and challenge  

TA NEA:   Huge development: 32-billion-euro lifejacket    

EFIMERIDA TON SYNTAKTON:  Large funds but too many vague spots   

AVGI:  Dead Students Society: The experiment of Education Minister, Kerameos, failed  

RIZOSPASTIS:  Tourism-Horeca workers to hit the road today in order for their voice to be herd loudly  

KONTRA NEWS:  92 acres in Mykonos leased for 100 years for €9,000 per year   

TO PONTIKI :   The government is in defensive mode mode regarding national issues and the economy      

DIMOKRATIA:   New Democracy’s is ‘whitewashing’ the Prespes agreement signed by SYRIZA  

NAFTEMPORIKI:  Greece will get €32 bln from the Recovery Fund      


URSULA’S GAMBLE: European Commission President Ursula von der Leyen on Wednesday proposed a €750 billion recovery fund, using borrowed money to be repaid over 30 years, alongside a €1.1 trillion, seven-year budget that will secure resources for priorities including fighting climate change and promoting digital transformation. By doing so, she’s betting that national capitals will put aside any misgivings and cut a fast deal, write David Herszenhorn and Lili Bayer.

Now the hard part … The plan will be subject to difficult discussions among European leaders. And as a Dutch diplomat put it, “the positions are far apart and this is a unanimity file; so negotiations will take time. It’s difficult to imagine this proposal will be the end state of those negotiations.”

Loosen up: The Commission is confident the greatest concerns of the so-called frugal four – the Netherlands, Austria, Sweden and Denmark — have been taken on board. “We have a lot of arguments to provide them … It’s not about taxpayer money from one country that will pay for another,” Internal Market Commissioner Thierry Breton told Playbook. “Everything that we will do for tourism will also help them.” (More on the reactions from the frugals below.)

Don’t hold your breath for an agreement next month: European leaders will meet on June 19 (whether virtually or in person has yet to be decided), but Paris and Berlin have already poured cold water on hopes the next European Council could see to a deal. EU leaders should find a compromise before the fall to give national parliaments and the European Parliament “enough time” to discuss and ratify the proposed mechanisms so that they can enter into force on January 1, German Chancellor Angela Merkel said.

GOOD MORNING, and welcome to the day after recovery day. I’m Laura Kayali, from POLITICO’s technology team. But rest assured, I won’t bore you with insights on coronavirus apps and platform regulation. Or will I …


WHAT’S ON THE TABLE: The Commission’s €750 billion plan — dubbed “Next Generation EU” — would provide €500 billion in grants to countries hit hardest by the pandemic, such as Spain and Italy, and make another €250 billion available as loans. That’s in addition to a revised seven-year budget proposal — the EU’s Multiannual Financial Framework (MFF) — totaling €1.1 trillion for 2021 to 2027. The proposal is below the level originally suggested by the Commission in May 2018, but higher than a compromise plan put forward in February by European Council President Charles Michel.

France, Germany take credit: German Finance Minister Olaf Scholz told reporters Wednesday that it was the Franco-German proposal that “succeeded in bringing about a new start in Europe.” While the Commission proposal still needs the backing of all 27 EU countries, Scholz said “there is a very high probability that a good understanding will be reached.” The self-praise was similar to remarks from French President Emmanuel Macron, who also said the Franco-German deal “made this progress possible.”

Martin Selmayr? Hold my beer. The Commission’s presentation choreography was disturbed by Economy Commissioner Paolo Gentiloni, who stole von der Leyen’s thunder by tweeting the magic number before the official announcement to the European Parliament.

MAKE NEW TAXES WITH OLD TAXES: Under the plan, the Commission calls on EU countries to agree to new revenue streams — so-called own resources — to cover the repayment and interest costs of the money borrowed for the recovery plan. They include a digital tax, a tax on large companies’ operations, a carbon levy on non-EU imports and a plastics tax. In addition to that, the EU executive would raise new revenue through the bloc’s carbon market. But most of these proposals, some of which date back from before the coronavirus crisis, face significant hurdles. Here’s a reality check for POLITICO Pro subscribers.

The mysterious single market tax: The Commission’s suggested tax on large companies’ operations would target firms “that draw huge benefits from the EU single market and will survive the crisis.” At a press conference Wednesday, Budget Commissioner Johannes Hahn defended the proposal, but did not go into detail on how the levy might work. Previous attempts to establish a common consolidated tax base have proven difficult, but Hahn suggested the new proposal is more straightforward and “achievable.”

NOT THE GREENEST DEAL: The Commission said the coronavirus recovery investments should “do no harm” and follow the bloc’s energy and climate priorities. But the proposals fall short of conditioning recovery investments on hitting the bloc’s green goals or explicitly excluding investments in fossil fuels, which environmental campaigners had pushed for, reports Kalina Oroschakoff for POLITICO Competition and Industrial Policy, Energy and Climate, Financial Services, Sustainability and EU Budget Pros.

FURTHER READING 1: Here’s POLITICO’s guide to what’s in the plan for key sectors of the EU’s economy, available for all Pro subscribers.

FURTHER READING 2: The Commission also adopted a revised 2020 working program, which lays out timelines for legislative initiatives on climate, digital policy, health and more.


EPISODE 2, SCREENING TODAY: Now that von der Leyen and Hahn have unveiled the big picture, other commissioners will have their chance to shine this morning. Executive Vice President for the Economy Valdis Dombrovskis and Gentiloni will kick off at 10 a.m. with a press conference on “recovery and resilience.” (Gentiloni will also speak at a webinar later this morning.) That’ll be followed by a presentation by Executive Vice President for the Green Deal Frans Timmermans, Jobs and Social Rights Commissioner Nicolas Schmit and Cohesion and Reforms Commissioner Elisa Ferreira on “a green and just recovery.” The third conference will feature Vice President for the European Way of Life Margaritis Schinas and Health Commissioner Stella Kyriakides, who’ll focus on the health program.

Speaking of which … On Wednesday, the Brussels health bubble was cheering for the proposed €9.4 billion health program — a big leap from the €413 million the Commission allocated for health in its 2018 proposal. What is yet to be seen is whether more money gives the EU more power over health (a long-guarded member country competence). Stay tuned.


👍¯\_()_/¯👎: Here’s where some of the key stakeholders currently stand on the proposals:

PARLIAMENT’S MOSTLY ENTHUSIASTIC, BUT … Leaders from the European Parliament’s major mainstream groups — the European People’s Party, the Socialists and Democrats, Renew Europe and the Greens — mostly welcomed the Commission’s plans. But some MEPs are unhappy with the numbers: MEPs on the culture committee slammed the budget allocated to culture and education, while the industry, research and energy committee called for more money for the Horizon Europe research program.

Strings, please: “If we are going to allow loans and grants, there must be very clear conditions linked to these, so that the money will be received where it’s most needed,” said Johan Van Overtveldt, the ECR budget committee chairman.

ALL EYES ON THE FRUGALS: It’s not a yes, but it’s not a no either. Austrian Chancellor Sebastian Kurz told POLITICO’s Matthew Karnitschnig that he and the other leaders of the frugal four were encouraged by some aspects of the Commission’s proposal, but cautioned it represents just a “starting point” for negotiations.

Pros: “That there is a time limit and that the fund will be a one-time emergency measure and not the first step toward a debt union,” said Kurz, who has emerged as the group’s unofficial spokesman.

Cons: “When it comes to the ratio of credits and grants, that’s an area where we really think there needs to be more negotiation,” Kurz said. The frugals will settle on a common negotiating position in the coming days.

FRANCE’S RED LINES: “Having common debt — it’s a paradigm shift, it’s an unprecedented change, it’s a revolution,” French Secretary of State for European Affairs Amélie de Montchalin said Wednesday. And Paris has no intention of letting that revolution slip away. Rym Momtaz writes in to tell us that an Elysée official said: “It is out of the question for us to backpedal on the principle of common debt, it’s a historic breakthrough to have it in the Commission’s proposal with large support from member countries.”

On the European Defense Fund: “We want it to go beyond the €10 billion mark, it’s an essential tool for European security and defense,” said the Elysée official, referring to the amount allocated to the European Defense Fund in the MFF proposal. “It’s one of the points on which France will insist in the coming weeks during the budgetary negotiation.”

GERMANY’S LONG-TERM VISION: Germany’s Olaf Scholz told POLITICO’s Bjarke Smith-Meyer that he sees the recovery fund as being about more than just money. “It’s about making Europe stronger and working on better sovereignty of our European Union, which will be absolutely necessary in a world which will be completely different in 20 years,” he said. Full interview here.

️ FROM ITALY, PORTUGAL, GREECE: The recovery package “goes in the direction indicated by Italy … 500 billion in grants and 250 billion in loans are an adequate figure,” Prime Minister Giuseppe Conte tweeted. Portuguese Prime Minister António Costa also welcomed the proposals and stressed “the importance of the proposed strengthening of the Cohesion Policy and Rural Development.” Greek Prime Minister Kyriakos Mitsotakis said: “The bar has been set high. Now it’s up to the EU Council to rise to the occasion.”

😐 FROM WARSAW: Polish Prime Minister Mateusz Morawiecki said the new budget proposal and the recovery fund are “a good starting point,” POLITICO’s Zosia Wanat writes in to report. But while the Polish government is pleased with the proposals for new own resources, such as the digital and corporate taxes, which it has been lobbying in favor of, it continues to oppose the climate taxes.


MERKEL LOOKS EAST: Relations with China “will become a foreign policy priority” of the German presidency of the Council starting in July, Angela Merkel said during a debate organized by the Konrad Adenauer Foundation on Wednesday. “We Europeans must recognize the determination with which China claims a leading place in the existing structures of international architecture,” Merkel said.

Top targets: Merkel wants the German presidency to reach an investment agreement with Beijing, make progress on climate protection, agree on sustainable development goals for Africa and “improve transparency standards for global pandemics,” POLITICO’s Hans von der Burchard writes in to report. Beijing is going to love the sound of that last one

LEAK PROBE: The EU’s diplomatic service has launched an investigation into the leaking of an internal email criticizing how a report on Chinese disinformation was edited. More from Hans here.

DOUBTS ABOUT GERMAN SPY PROBE: The German federal prosecutor’s office has raised doubts about the evidence of alleged spying activities by former EU Ambassador Gerhard Sabathil for China, reports local media outlet Stern. Prosecutors are questioning the veracity of the tapped phone conversations that led to the initial suspicions against Sabathil and two other suspects in the case, according to the report.

From the archive: Read Matthew Karnitschnig’s essential profile of Sabathil from earlier this year, when the allegations first surfaced.

US CANCELS HONG KONG: U.S. Secretary of State Mike Pompeo formally certified to Congress on Wednesday that the Trump administration no longer views Hong Kong as an autonomous region of China. The move effectively terminates the city’s special status under U.S. law, which has helped it flourish as a destination for trade and investment, Doug Palmer reports.


AND I AM TELLING YOU, HE’S NOT GOING! While the Continent was focused on budget business, over in the U.K., Prime Minister Boris Johnson was facing a grilling from the House of Commons’ liaison committee over alleged breaches of coronavirus lockdown rules by his chief adviser Dominic Cummings. Key takeaway: Cummings ain’t going. Charlie Cooper and Emilio Casalicchio have more.

MERKEL VOWS ‘TOUGH FIGHT’ WITH BRUSSELS OVER LUFTHANSA RESCUE: Germany’s Lufthansa bailout is putting Angela Merkel on a collision course with European Commission competition chief Margrethe Vestager, Joshua Posaner and Thibault Larger report.

BRUNO’S INFERNO: Can France’s finance minister guide his country through the coronavirus crisis? POLITICO’s Elisa Braun spent time with Bruno Le Maire and his entourage as he was preparing to do battle — in France, against the devastation being wrought by the coronavirus, and in Europe, as he and Emmanuel Macron worked to close a deal on a pan-European response to the crisis. Check out her must-read profile here.