Bloomberg: Greece steps out of Enhanced Surveillance in August

Greece aims to exit the strict regime of Enhanced Supervision from the institutions of the European Union, which followed its exit from the Support Programs, in August 2022, in a symbolic move that will put an end to the over ten years of economic crisis that rocked the country, broadcasts Bloomberg, citing its sources.

With the country aiming to regain an investment grade for its bonds, Bloomberg notes, there is a consensus between the EU’s most indebted country and its European partners that the Enhanced Surveillance program will “roll down” by the end of the summer, according to with knowledgeable officials. Final decisions are expected in June, they note, adding that the talks are currently secret.

The Enhanced Surveillance regime – by officials from the European Commission, the European Central Bank and the European Stability Mechanism – is the result of the end of Greece’s last bailout in 2018. Under this regime, the country benefits from debt relief measures. through regular aid payments, in exchange for achieving economic reform goals.

The move will be a turning point for the Greek government, as the latter tries to reassure investors and rating agencies that the old bad days of the debt crisis have passed irreversibly and thus conquer the investment grade.

Any such development is not expected to affect the waiver which allows the ECB to buy Greek bonds, although they are considered “junk” from an investment point of view.

This week, Athens completed the early repayment of loans it had received from the International Monetary Fund during the early stages of the debt crisis. It is also rapidly repaying the first loans it had taken on a bilateral basis from eurozone countries in 2010, before a European crisis mechanism was set up.

The total installments of debt relief under the current regime for Greece correspond to 5 billion euros. An installment that was “lost” due to the 2019 elections is likely to be disbursed this October.