EU Cohesion Policy to the rescue of Greek societal cohesion

Greece has been re-emerging from the depths of a crisis of unprecedented magnitude, one that has had a deep impact not only in the financial structure of the country, but also shook the core foundations of social cohesion. Leaving behind the burdens of the past we must look ahead in order to transform ourselves and be at the forefront of effective application of the EU Cohesion Policy and the efficient and innovative use of structural funds.
Although in the past years the voices of euro-skepticism have become louder, especially in the the radical extremes of the political spectrum, the vast majority of Greeks know that EU Cohesion Policy funds are going to be the basic – if not the only – lever for growth in the following years. With national funds practically limited to the level of barely sufficing for the co-financing participation and EU funds required to spearhead the recovery effort of an entire country, we must seek for alternative, innovative financial instruments that will leverage private funds along with public ones. Our policies should reflect that priority and we should aim for market-oriented policies that will spur growth, create sustainable jobs and improve competitiveness.
The role of Cohesion Policy funding of the 2007-2013 period has been significant in supporting the Greek economy during first years of the crisis, although amendments had to be applied given that the Operational Programmes were designed with a pre-crisis mindset. Therefore, the change of the co-financing rate up to 95% has resulted in a further €1.3 billion been paid to Greece while reducing the burden to the struggling national budget. The European Investment Bank (EIB) has been summoned in order to create a Guarantee Fund for SMEs, which essentially uses structural funds in order to create a guarantee of potentially € 1 billion global loan from EIB. Finally, a youth initiative has been deployed in order to subdue the untamable unemployment with additional resources from the European Social Fund. Although these amends have had a significant impact in deteriorating the severe consequences of the crisis, it is my strong conviction that we must strive to do better.
Greece has been allocated with €15.35 billion for the 2014-2020 period, which will be distributed through five sectoral and thirteen regional operational programmes. The role of these funds is to positively contribute to a paradigmatic shift in the country’s development model and in accordance with the institutional and organizational changes that are still taking place. The vision is to restore the Greek economy and upgrade the productive capacity while fostering and protecting societal cohesion by creating and preserving sustainable jobs and focusing on extroverted, innovative and competitive entrepreneurship. This vision is evident on all submitted Operational Programmes and explicitly shows Greece’s intention and commitment to reform and leave behind the morbidities of the past.
As effective good intentions can be, there are still things that need to be taken into consideration and perhaps provide a fruitful ground for discussion on possible amends and enhancements on the application of Cohesion Policy in Greece. First and foremost, I believe that there is significant room of improvement in the allocated funds for Greece. Although there have been provisions for countries with temporary budget difficulties, I cannot help but stress the need of reconsideration in the total allocated funds at least as soon as the midterm review. Given that the allocation of funds between regions were made based on pre-crisis data, a distribution on the updated data will show not only that Europe is responsive to extenuating circumstances that may occur but also that it takes seriously into consideration the efforts of the Greeks in such circumstances.
Additionally, I believe that since Greece has been the first country to apply a fiscal adjustment programme that generally deviates from European norms, perhaps there is room for regulatory initiatives in the application of cohesion policy and the use of structural funds. One such example would be the use of structural funds in order to finance SMEs with working capital along with investment capital. The past years, most Greek companies have been unevenly burdened with low to no credit from their European counterparts since most payments had to be made in cash, which combined with the crisis in the banking sector, has significantly reduced liquidity. Furthermore, given the successful application of the Guarantee Fund for the SMEs, perhaps the European Investment Bank could again be used in order to deploy a programme to finance debt through structural funds.
These are just some thoughts in the beginning of the new programming period, which finds us all in front of new and diverse challenges to overcome in order to meet our common objective, the deployment of an investment policy for jobs and growth.