ECONOMY

High marks from Brussels

Commission cautions on slow progress in payment of state arrears and credit sector issues

high-marks-from-brussels

The European Commission has recorded progress in Greece’s reforms but also some delays, particularly in the clearing of the state’s outstanding arrears.

The 11th post-bailout monitoring report, published on Wednesday, is generally favorable, noting that Greece has taken the necessary initiatives to fulfill its obligations despite the challenges from the pandemic. It notes that the country has entered the final year of its enhanced surveillance as the commitments it made upon exiting the bailout mechanism in 2018 will need to be fulfilled by mid-2022. There has been progress in many of them, with some completed while others remain pending and efforts need to speed up.

The report goes on to confirm that the economy is recovering faster than anticipated after the lockdowns, albeit with some risks and uncertainty related to the pandemic, inflation and court decisions on retroactive dues to pensioners.

There has been substantial progress in privatizations, the European Commission argues, making special reference to Elliniko, Egnatia Odos and Public Gas Corporation (DEPA). It also attributes significance to various other reforms such as the online system for licensing and the national portal for the codification and reform of legislation.

However, Brussels also highlights the sectors where delays have been observed, with the biggest problem remaining the state’s overdue arrears. The Commission records that they amounted to 900 million euros at end-July, against a target for €500 million, with the 80% overrun generating serious concerns. As things stand, therefore, it appears far from feasible to have the stock of state dues cleared by the end of September (with the exception of outstanding pension issues) while the deadline was at end-June.

At the same time progress in the tasks related to the credit sector has also been slow, such as the reduction of pending bankruptcy cases, the acceleration of online property auctions and the clearing of state collateral.