EU to release Greece from regime of fiscal supervision by the end of June

BRUSSELS – This time it’s definite: Following months of promises, minced words and hints, European Union Economic and Monetary Affairs Commissioner Joaquin Almunia yesterday officially announced Greece’s impending exit from a two-year regime of supervision for having violated the provisions of the Growth and Stability Pact, after Athens succeeded in efforts to bring its public deficit below the 3 percent of gross domestic product (GDP) threshold. Presenting his annual report on the situation of public finances in the eurozone, Almunia notes a marked improvement in the performance of member states, singling out Greece and Germany, which, he said, would exit the excessive deficit procedure «very soon.» «As soon as we publish the report of spring forecasts next Monday, I shall submit to the Commission a proposal for the lifting of the excessive deficit procedure. This recommendation will be discussed by the Commission and the Economy ministers’ council (Ecofin) before the end of the German EU presidency,» he told a press briefing. Ecofin is due to meet on June 5 in Luxembourg. Almunia noted that Greece, along with the other transgressors of the Pact – Germany, Italy and Portugal – «have achieved a substantial» correction of their deficits, moreover with measures of a structural nature which yield not just one-off but long-term benefits. However, the good news of the end to surveillance was accompanied by what has come to be seen as a permanent feature of all economic reports coming out of Brussels: a warning on the future of the pension system. Almunia’s report notes that all member states should maintain a «healthy long-term fiscal position,» that is, to limit as much as possible their public deficit and debts being created also due to the gradual aging of populations. «Such problems will take a particularly acute form in Greece and Portugal which run the risk of showing a double-digit increase in spending related to the aging of population in coming decades.»