The Eurogroup discussed Greece’s progress with reform implementation and its macro-economic outlook, on the basis of the twelfth enhanced surveillance report published on 24 November.
After a sharp contraction of economic activity in 2020, the Commission’s autumn forecast shows a substantial economic recovery in Greece this year and in 2022 and 2023. The timely, targeted and temporary support measures taken by the Greek authorities have cushioned the effect of the pandemic on businesses and workers. The authorities’ efforts have been supported by the new EU instruments, such as NGEU and SURE, established in the wake of the pandemic with the aim to mitigate its effects and support economic recovery. The implementation of the reforms and investments of Greece’s Recovery and Resilience Plan is expected to provide a substantial growth impulse and should provide a basis to consolidate efforts towards the green and digital transition.
We welcome the further policy reforms that have been achieved in the challenging circumstances of the Covid-19 pandemic and the catastrophic fires in August 2021. In particular, we welcome the fulfilment of the specific commitment in the area of public financial management establishing the chart of accounts for the central administration and the adoption of anti-trust remedies in the energy sector, which completes the commitments made for this sector. Moreover, good progress has been achieved in the simplification of investment licensing, privatization and governance of state-owned enterprises, social welfare and public administration.
The uncertainty entailed by the pandemic continues to be present and underscores the need to continue tackling decisively the existing medium-term risks and challenges identified in the 12th enhanced surveillance report. We encourage the Greek authorities to continue and advance their efforts with regard to financial sector reform and clearance of arrears. We also note some delays in the areas of justice and health, and we call upon the authorities to accelerate progress to deliver on commitments in these areas. These issues will continue to be monitored in the context of enhanced surveillance.
Against this background, the Eurogroup welcomes the assessment by the European institutions that, despite the challenging 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 sixth 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. We look forward to the 13th enhanced surveillance report, which is expected to be published in February 2022.
The Eurogroup was informed that Greece is considering an early repayment of the remaining amount of its outstanding IMF loan, as well as a partial prepayment of its loans under the Greek Loan Facility (GLF) that would correspond to the principal payments due in 2022 and 2023 under the GLF, with a view to having a positive impact on Greece’s public finances.
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