ECONOMY

‘Grexit’ from strict monitoring

Commission report paves the way for the country’s emergence from enhanced surveillance

‘Grexit’ from strict monitoring

The European Commission has established progress in Greece in matters that until recently were thorny issues for the local economy, such as the clearing of overdue state arrears, including pensions, in its 13th post-bailout report. This paves the way for the country’s emergence from its enhanced surveillance status, most likely this August.

The report notes that the Greek government has expressed its intention to fulfill its outstanding obligations by the end of the year’s first half, although Brussels points out that the status decision will depend on Greece’s progress in to what extent it implements its commitments as well as the broader financial policy environment.

The next report – the 14th – will be published in May and is associated with national debt lightening measures worth 750 million euros. Another installment of the same amount has also been pending since 2019, for which no decision has been made yet: It may be disbursed at the same time or a little later, or upon the country’s exit from enhanced surveillance alongside the final assessment of the economy’s post-bailout progress.

Although the report released on Wednesday is mostly positive, it also highlights the delays recorded, half of which concern justice. Limited progress has been recorded in the reform of healthcare and in the Independent Authority for Public Revenue’s new automatic taxation system, which was scheduled for end-April and has now been postponed till end-September.

Athens got high marks for the country’s positive fiscal and growth picture and its progress in reforms. On expired debts of the state, Brussels found they have been significantly reduced and their clearing will be completed within this month, with the exception of pension applications, which will take until June.

The Commission is also aware of the second raise in the minimum salary the government is preparing, noting it has received assurances that the hikes will safeguard competitiveness and will not carry a high fiscal cost.