Barrage of reports on the Greek economy

By Tasos Dasopoulos

The European Commission is publishing three consecutive reports on Greece today, which will describe the situation and prospects of the Greek economy from each other’s point of view.

The first will be the report on the 12th evaluation under enhanced supervision. The European Commission will once again note progress in a series of reforms and will propose the payment to Greece of the 6th tranche of approximately 650 million euros, from the bond profits currently held by the ECB and other Central Banks.

At the same time, new timetables will be given for the reduction of overdue public debts, the adjudication of the 30,000 pending cases of the old Katselis law and the completion of the institutional framework, for the full implementation of the new bankruptcy code.

Specifically for the latter, he will also point out as pending the submission and passing of the law which will set the framework for the establishment and operation of the new real estate management body for households that will declare bankruptcy and grant their first home.

The same report will include a revised report on Greek debt sustainability, prepared by the ESM and the EU. The report will reportedly once again conclude that Greek debt remains viable despite the fact that in 2020 it exceeded 200% due to the pandemic.

The opinion on the preliminary draft budget

The second report will be an opinion of the European Commission on all the draft budgets of the EU Member States and therefore on Greece.

And this report will be positive with the Commission accepting the basic directions of the Greek budget in terms of the philosophy and the goals it sets.

The Commission is expected to observe the deterioration of fiscal figures (mainly the deficit and the primary deficit) in relation to the forecasts of the Medium Term Fiscal Strategy 2022-2025, due to the brave measures to support the economy, which reached 17 billion this year.

In this direction, he will propose for 2022, to base the fiscal adjustment but with careful withdrawal of fiscal measures to support the economy, in order to avoid sharp upheavals in the economy.

Macroeconomic imbalances

The third report published today will deal with macroeconomic imbalances, ie the chronic errors that are identified in a different form in each Member State and should be improved by adopting appropriate policies.

In Greece, the report will highlight the ongoing problems left behind by the memoranda.

The first is very high unemployment, which remains the highest in the EU, especially among young people and women.

The second will be the very high investment gap of Greece and the previously low attractiveness of the country as an investment destination.

The third is low productivity, which does not allow the economy to achieve economic growth, commensurate with its comparative advantages and its workforce.

Finally, as a significant macroeconomic anomaly will be pointed out where a high debt ratio as a percentage of GDP.

Specifically, it will be pointed out that the Greek debt that exceeds 200% of ASEP, although it is sustainable after its settlement in 2018, faces long-term risks from changes in monetary policy and future economic crises.

Nevertheless, the Government’s effort to carry out reforms even within the pandemic will be recognized. It will also be emphasized that all major problems such as unemployment, low productivity and the investment gap will begin to be addressed through the proper use of the Recovery Fund resources.