The freedom of movement of the Greek economy is expanding after the country’s exit from the regime of increased surveillance in 20 August.

As the Minister of Finance Christos Staikouras “We will have more flexibility in combining measures, but with respect and adherence to European rules.”

Three memorandums intervened and four years of observation after the memorandum with the obligation to fulfill a number of obligations until the exit from the special regime took place.

The monitoring of the economy was thorough, with heads of institutions visiting Athens four times a year and compiling related reports that were monitored by the markets and largely judged the economic future of Athens. country.

Greece will be free to pursue its economic policy with priorities determined by the government, not Brussels, and will be subject to the same rules of control that the rest of Europe is subject to.

That is, from now on, as announced European Commissionmonitoring of the economic, fiscal and financial situation in the country will continue in the context of post-program monitoring and the European Semester.

The outstanding reform commitments will be tracked in the context of the first post-program oversight report to be published in November this year, on which the Eurogroup decision on the last tranche of debt relief agreed in June 2018 could be based.

Important reforms and investments, also according to the Commission, are envisaged in parallel in Greece’s recovery and resilience plan.

Monitoring by European institutions will continue until 2059, that is, until the country repays 75% of the loans received under the memorandums.

However, the country will move to a simple post-program monitoring phase, with an assessment of the progress of the economy conducted every six months. There will also be a quarterly assessment by the European Stability Mechanism, as is the case with all countries borrowing from the ESM, which, however, is not made public, but fixes the stability of the member states’ economies.

As for the backlogs that need to be closed, it is characteristic that the pandemic and the energy crisis, combined with the war in Ukraine, left a number of prerequisites that could not be completed within the framework of supervision.

They are also associated with the payment of the last installment from the profits on Greek bonds. The list includes 22 mandatory conditions due in October (financial sector, liquidation of debts, reduction of unpaid pensions, primary health care, land registry, labor law, etc.).

Looking ahead, the expected extension (until the exact date is known) of the exemption clause for another year provides fiscal flexibility to support households and businesses into 2023 as well.

However, the pace must be very cautious due to the “wounds” still existing in the economy, the main one being the high public debt, which is expected to fall to 180.2% of GDP at the end of 2022. 3% of GDP in 2021 G.). Beyond 2023, countries with debt above 60% of GDP should pursue fiscal policies that aim to achieve gradual debt reduction and medium-term fiscal sustainability through gradual deficit reduction, investment, and reform.

As specifically stated in the Commission’s European Semester report, highly indebted Member States such as Greece should pursue prudent fiscal policies in 2023, in particular by limiting national current spending growth below the European average, taking into account continued , temporary and targeted support for households and enterprises most vulnerable to rising energy prices, as well as support for refugees from Ukraine.

Finally, the country will seek to create fiscal space by increasing permanent GDP and revenues, which will finance temporary interventions (e.g. fuel pass, energy pass, increase in heating allowance, etc.) as well as permanent measures (e.g. , already reduced ENFIA or the abolition in 2023 of the solidarity fee for civil servants and pensioners, etc.).

But also be prepared to turn to the markets (which will become easier with the acquisition of investment grade) when conditions allow, in order to obtain funds for additional interventions. Bearing in mind, of course, that Brussels’ watchful eye will always be on public debt and primary deficits (or surpluses).

RES – OIE