The European Commission’s first “enhanced surveillance” report this week regarding thrice-bailed out Greece calls on the government to implement 16 creditor-mandated reforms and actions by the end of the year.
The Commission referred to increased staffing of public revenues authority, increased rates for covering the Greek state’s arrears to the private sector, better management of NPLs plaguing four systemic banks and privatizations.
The report, by the Commission for the country, reads, in part:
“Greece successfully completed its European Stability Mechanism (ESM) stability support programme on 20 August 2018. Following the end of that programme, Greece has been integrated into the regular economic surveillance framework for euro-area Member States under the European Semester for economic policy co-ordination. In order to cater for the specific needs and challenges of Greece, the Commission has activated enhanced surveillance for Greece under Regulation (EU) No 472/20131, effective as from 21 August 2018.2 That decision acknowledges the fact that over the medium term, Greece needs to continue adopting measures to address the sources or potential sources of economic and financial difficulties, while implementing structural reforms to support a robust and sustainable economic growth.
Greece has affirmed its general commitment in the Eurogroup of 22 June 2018 to continue and complete reforms adopted under the ESM programme and to ensure that the objectives of the important reforms adopted under the financial assistance programmes are safeguarded. The authorities have moreover developed a Growth Strategy and plan to monitor its implementation.
The Commission will release enhanced surveillance reports on a quarterly basis, following a timetable that is aligned with key steps of the European Semester. In the context of enhanced surveillance, the Commission, in liaison with the ECB3 and, where appropriate, the IMF, conducts regular review missions to verify the progress made; the ESM participates both in the context of its Early Warning System and in line with the Memorandum of Understanding of 27 April 2018 on working relations between the Commission and ESM. In preparation of this report, a joint mission to Athens took place on 10-14 September 2018.
This first enhanced surveillance report is issued alongside the 2018 autumn Semester package that includes an assessment of the 2019 draft budgetary plan sent by the Greek authorities to the Commission on 15 October 2018. Following the submission of the draft budgetary plan, a package of discretionary measures to be included in the 2019 budget has been finalised that meets the agreed primary surplus target of 3.5% of GDP. The Commission considers that the final package is a balanced approach to meet agreed fiscal and economic goals in a manner that is also supportive of social inclusion.
Enhanced surveillance provides a comprehensive framework for monitoring economic developments and the pursuit of policies needed to ensure a sustainable economic recovery.”
