A European Central Bank (ECD) report has found that Greece is among the countries most dependent on EU funds due to limited access to bank lending.
The report highlights how the EU funding boosts productivity.
The new study by the ECB has examined the effectiveness of the EU’s Cohesion Policy as an investment program, focusing on which businesses receive funding and how this financial support impacts their performance.
The report, covering the period 2014–2020, concludes that EU subsidies play a crucial role in driving business growth, particularly in countries where access to bank credit remains restricted. The authors stress that the findings offer valuable insights not just for the past, but also for shaping future funding strategies.
Key findings of the ECB report
- EU funding increases the likelihood of new investments.
- Positive effects are strongest among small and medium-sized enterprises (SMEs).
- Results vary significantly between countries and regions.
Across the EU, firms receiving subsidies experience an average 15% increase in capital within a year, followed by steady gains in productivity—around 1% after one year and up to 3% after four years. The effects are particularly pronounced for smaller firms and those facing financial constraints.
Greece: A case of high dependency
The study identifies Greece as one of the countries most dependent on EU funds, especially through the Operational Programmes of Cohesion Policy (known locally as ESPA). Following the debt crisis, many Greek businesses struggled to secure loans from banks, making EU subsidies a vital lifeline for private investment.
Between 2014 and 2020, 36,379 organizations in Greece benefited from these programmes. Greek firms, especially SMEs, showed larger productivity gains from EU grants compared to peers in other countries, as subsidies often substituted for missing bank financing.
The ECB notes that Greek programmes focused on:
- SME support (competitiveness, innovation, modernisation).
- Green transition (energy efficiency, renewables).
- Social cohesion (youth unemployment, social structures).
While projects linked to the green transition were found to be less impactful on productivity, they still contributed to sustainable development goals.
 report has found that Greece is among the countries most dependent on EU funds due to limited access to){kind=link}
It is important to note that this report covers the period 2014-20, a period during which Greece had little or no access to voluntary foreign financing (at least not until 2018/19). EU funding has been a major driver of growth (and corruption!) ever since Greece joined the EU. It is still important today but not nearly as important as in previous years. In fact, today, foreign lenders line up to make financing available to the Greek state, its commercial banks and to selective large corporations.