Gentiloni-Donahue: Greece’s progress significant, delays linked to pandemic

After the meeting of the Eurozone Finance Ministers, the Minister of Economy, Paolo Gentiloni, and the President of the Eurogroup, Pascal Donahue, expressed their satisfaction with the progress made by Greece in the implementation of the reforms, pointing out that some delays due to and in the devastating fires of summer.

“There are some delays, especially in clearing the arrears,” Commissioner Gentiloni told a news conference after the meeting. “But overall our view is that these delays are largely linked to the pandemic. We encourage the Greek government to fill the gap – but overall the assessment was very positive at the Eurogroup table and all the ministers recognized that,” he added.

The same view was expressed by President Donahue. “We welcome the country’s progress, despite the difficult conditions of the pandemic and the terrible fires of August …. Some steps have been delayed, we encourage the Greek government to move forward,” he said.

Finally, the President of the European Stability Mechanism (ESM) Klaus Regling noted that there is clear progress from the Greek government in many areas. “Of course Greece, like other countries in Europe and the world, faces risks and uncertainties associated with the pandemic and rising energy prices. But I believe that Greece has shown that it can handle this and there is a commitment to continue reforms “, he added.

The Eurogroup statement

The Eurogroup discussed Greece ‘s progress in implementing reforms and its macroeconomic prospects, based on the 12th enhanced surveillance report published on November 24th.

Following a sharp contraction in economic activity in 2020, the Commission’s autumn forecasts show a significant economic recovery in Greece this year, 2022 and 2023. The timely, targeted and temporary support measures taken by the Greek authorities have reduced the impact of the pandemic on business and employees.

The authorities’ efforts were supported by new EU instruments, such as the NGEU and SURE, created in the aftermath of the pandemic to mitigate its effects and support the economic recovery. The implementation of the reforms and investments of the Greek Recovery and Sustainability Plan are expected to give a substantial impetus to growth and should be the basis for consolidating efforts towards a green and digital transition.

We welcome the further policy reforms that have been achieved in the difficult conditions of the Covid-19 pandemic and the catastrophic fires in August 2021. In particular, we welcome the fulfillment of the specific commitment in the area of ​​public finance management that the adoption of antitrust measures in the energy sector, which completes the commitments made in this area. In addition, good progress has been made in simplifying investment licensing, privatization and governance of state-owned enterprises, social welfare and public administration.

Uncertainty from the pandemic is still present and underlines the need to continue to address the existing medium-term risks and challenges identified in the 12th enhanced surveillance report. We encourage the Greek authorities to continue and advance their efforts to reform the financial sector and clear overdue debts. We also note some delays in the areas of justice and health and call on the authorities to speed up progress in fulfilling commitments in these areas. These issues will continue to be monitored in the context of enhanced surveillance.

In this context, the Eurogroup welcomes the assessment of the European institutions that, despite the difficult conditions caused by the pandemic, Greece has taken the necessary steps to achieve its specific reform commitments and that there are the necessary conditions to confirm the release of the sixth installment of the debt measures. Subject to the completion of the national procedures, the Eurogroup Working Group and the Governing Council of the European Financial Stability Facility (EFSF) are expected to approve the transfer of SMP-ANFA equivalent income amounts and the reduction of the zero interest rate to zero EFSF. We look forward to the 13th Enhanced Surveillance Report, which is expected to be published in February 2022.

The Eurogroup was informed that Greece is considering the possibility of early repayment of the remaining amount of its loan from the IMF, as well as partial prepayment of its loans under the Loan Facility for Greece (GLF) which will correspond to the payments for 2022 and 2023 , in the context of the GLF, in order to have a positive impact on the public finances of Greece.