Enhanced surveillance ends
Finance minister hails closing of a difficult chapter, says move will help with global markets
The European Commission announced Wednesday that it is winding up years of surveillance of Greek government spending. The move marks a formal end to a major crisis that threatened to see Greece ejected from the euro single currency group, imposed severe hardship on its citizens and roiled global financial markets.
The Commission, which supervises the budgets of the 27 EU member countries, said it will end its “enhanced surveillance” program on August 20, noting that “Greece has delivered on the bulk of the policy commitments” made to its partners in the 19-country euro area.
Greece was granted billions of euros in three successive bailouts after 2010, when Athens lost access to international bond markets after admitting it had misreported key financial data. Greece’s debt ballooned to over 180% of GDP.
Two of the financial bailouts ultimately failed to improve things enough, although creditors in the Eurogroup demanded – and received – deep economic reforms that hammered citizens with austerity policies, including repeated tax hikes and pension cuts. Poverty and unemployment skyrocketed, and at one point about a quarter of the workforce was jobless.
In 2015, the leftist prime minister at the time, Alexis Tsipras, put his country’s membership of the euro area and, ultimately, the EU on the line by calling a referendum on whether Athens should accept the terms imposed on it by creditors, led by Germany. Voters rejected the terms, but the government then proceeded to impose draconian creditor-demanded conditions anyway.
But on Wednesday, the EU Commission said that now, “as a result of Greece’s efforts, the resilience of the Greek economy has substantially improved and the risks of spillover effects on the euro area economy have diminished significantly.”
“With this development, along with the early repayment of the International Monetary Fund loans… a difficult chapter for our nation ends after 12 years,” Greek Finance Minister Christos Staikouras said in response to a Commission letter confirming the enhanced surveillance would end.
Staikouras said the move reinforces Greece’s position in international markets. The government hopes to regain investment grade by next year.
