Press Releases Eurogroup statement on Greece of 30 November 2020

Eurogroup statement on Greece of 30 November 2020

The Eurogroup discussed Greece’s progress with reform implementation and its macro-economic outlook, on the basis of the eighth enhanced surveillance report published on 18 November.

As in the rest of the European Union, the pandemic has had substantial social and economic consequences in Greece. The Commission’s Autumn forecast shows a strong contraction in economic activity and rising unemployment in 2020, though a partial recovery is projected for 2021. We commend the Greek authorities for the large set of timely, targeted and temporary support measures taken to date to cushion the effect of the pandemic on businesses, workers and the healthcare sector.

We welcome the progress made with reform implementation in these difficult circumstances, in particular the adoption of the major reform of the Greek insolvency framework, which is expected to contribute to resolving the key challenges in the financial sector. Other areas in which good progress has been achieved include public administration, the energy sector, public revenue and social welfare. At the same time, the authorities have taken steps to address delays with key reforms due to the pandemic and most notably reforms in the healthcare sector.

The increased uncertainty entailed by the pandemic continues to underscore the need to tackle decisively the existing medium-term risks and challenges identified in the enhanced surveillance report. We therefore call on Greece to maintain and where necessary strengthen reform efforts to further support the economic recovery, improve the resilience of the economy and to underpin the commitment to improve long-term potential growth. In this context, we furthermore highlight the importance of using the funds available under the Recovery and Resilience Facility to maximum effect by implementing an ambitious pro-growth reform agenda. We also call on the Greek authorities to address remaining vulnerabilities in the financial sector, to continue implementing reforms in the area of public administration and public revenue administration and to proceed with the arrears clearance plan. We welcome the commitment by Greece to adopt as soon as possible secondary legislation for the insolvency reform and to implement the necessary IT system to ensure an effective enforcement of all collateral when the new insolvency rules enter into force. This will continue to be monitored in the context of enhanced surveillance.

Against this background, the Eurogroup welcomes the assessment by the European institutions that taking into account the adverse circumstances caused by the pandemic, Greece has taken the necessary actions to achieve its specific reform commitments, and that the necessary conditions are in place to confirm the release of the fourth tranche of policy-contingent debt measures. Subject to the completion of national procedures, the Eurogroup Working Group and the Board of Directors of the European Financial Stability Facility (EFSF) are expected to approve the transfer of SMP-ANFA income equivalent amounts and the reduction to zero of the step-up interest margin on certain EFSF loans, which are worth EUR 767 million in total. We look forward to the ninth enhanced surveillance report, which is expected to be published in February 2021.

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