Saturday , June 10 2023
Home / News / Economy / Greece among the 9 EZ countries compliant with Stability & Growth Pact

Greece among the 9 EZ countries compliant with Stability & Growth Pact

European Commissioner Vice President Valdis Dobrovskis slightly opened the window for a possible decrease of primary surplus targets for Greece. “If we see clearly positive trends in debt sustainability analysis, this can be reflected in the primary surpluses, as these two are closely linked,” he said in Brussels on Wednesday.

At the same time, Dobrovskis confirmed that the 4th report of enhanced post-monetary supervision paves the way for the repayment of €767 million of Greek bond profits.

He noted noted that the Greek government has requested that part of the returned Greek bonds profit will be used for investment, but it is “the creditors who will decided” at the Eurogroup on December 4.

In his opening remarks, the EC Vice said that Greece was among the nine Euro zone countries “compliant with the requirements of the Stability and Growth Pact.

“We have found that nine countries – Germany, Ireland, Greece, Cyprus, Lithuania, Luxembourg, Malta, the Netherlands and Austria – are compliant with the requirements of the Stability and Growth Pact;

Two countries – Estonia and Latvia – are broadly complaint;   

And eight countries – Belgium, Spain, France, Italy, Portugal, Slovenia, Slovakia and Finland – are at risk of non-compliance, Dobrovskis said.

Among the budgetary plans found at risk of non-compliance, “the ones that concern us most are those with high debt levels and where we do not see them being reduced fast enough,” he added.

These countries are “Belgium, Spain and France have very high debt-to-GDP ratios, of almost 100%. Italy’s exceeds 136% of GDP. And these countries are not expected to meet the debt rule.

“These four countries have not sufficiently used favourable economic times to put their public finances in order. In 2020, they plan either no meaningful fiscal adjustment or even a fiscal expansion,” he said among others.

He added “a word on Greece: many of us still remember the depth of the 2015 Greek crisis.”

“I am therefore glad that today we have published an encouraging and overall positive enhanced surveillance report for Greece,” Drobrovskis said.

The Eurogroup will discuss the report in December with a view to deciding on the release of the next debt relief measures.

Greece is on course to overachieve the agreed fiscal target of 3.5% of GDP this year. This would be the fifth year in a row of targets being exceeded. And according to our estimations, Greece would meet its fiscal target in 2020.

Capital controls have been lifted in September and the new administration is taking important steps to tackle the large stock of non-performing loans in the banking sector: this is key for strengthening the banks’ capacity to provide finance to Greek businesses and households. This work must continue.

The government is also progressing with initiatives to strengthen the business environment and boost investment.

Overall, Greece has taken the necessary actions to achieve its specific reform commitments for mid-2019. This is good news. And we hope the Greek authorities sustain the reform momentum and deliver on their ambitious agenda of future actions,” Drobrovskis said.

Check Also

Greek bond yield falls to 10-month low

Τhe 10-year Greek benchmark bond yield has this week fallen to its lowest levels in …