The return of the Greek economy to normal, with the end of the enhanced supervision process on August 20, was welcomed today by the President of the Eurogroup, Pascal Donahue, the Commissioner for Economy, Paolo Gentiloni and the head of the European Stability Mechanism, Klaug R.
During a press conference in Luxembourg, the President of the Eurogroup spoke about the impressive resilience of the Greek economy, despite the challenges of the pandemic, the fires and the war in Ukraine. “Despite the multiple challenges, we see continued commitment to the implementation of reforms and clear signs of growing resilience of the Greek economy,” he said. Pascal Donahue. He added that the necessary conditions have been met for the disbursement of the 7th installment, amounting to 748 million euros to Greece, for debt relief.
“We welcome the Commission’s intention not to extend enhanced supervision of the Greek economy after it expires in August,” Donachiou said, adding that this was “a significant achievement of the Greek government” and a steady progress since 2010. , which is recognized by the Eurogroup as another “landmark” for Greece.
For his part, the Commissioner for Economy, Paolo Gentiloni spoke of “very good news” and “historic day” for Greece. “I confirm the Commission’s intention to end the enhanced supervision process in August,” he said, adding that this was “a key step for the normalcy of the Greek economy”, after 12 years of efforts. He also said that Greece has successfully fulfilled its commitments and improved the resilience of its economy, while not failing to note that progress has been made in the last three years, despite the crisis of the pandemic and the war in Ukraine. He added, however, that Greece is committed to continuing the reforms within the normal post-programming period.
The head of the ESM, Klaus Regling stated that “Greece today is achieving an important milestone”. “The end of enhanced surveillance is historic,” he added, noting that progress on reforms, which will be monitored, continues. He reminded that Greece has to receive significant funding from the Recovery Fund and its commitment to the implementation of reforms is important.
“ESM has a special relationship with Greece. I have been involved with the issue of Greece for the last 12 years and I can really see the progress that has been made over the years. The problems were very big 12 years ago and now the country is in very good direction and the ESM considers the end of enhanced supervision to be perfectly justified, “Regling said.
He also noted that “ESM will continue to work closely with Greece, which will benefit from the Fund ‘s cheap loans for the coming decades.”
Answering a question from the Athenian Macedonian Agency, the head of the ESM stressed that “I am not worried that the rise in interest rates around the world will affect Greece.”
As he noted, Greece has taken an important step today, but is still facing a special situation, due to its increased public debt, which is the highest in the eurozone.
He added, however, that the cost of servicing the Greek debt is relatively lower than other eurozone countries that have a lower level of public debt.
As he explained, this is due to the fact that 60% of the Greek public debt belongs to official creditors. 50% of the Greek debt belongs to the EFSF and ESM. He also added that the interest rates of the two Funds remain low compared to the rise of other interest rates in recent months. In addition, he reminded that the decision with the withdrawal from the Memorandum in 2018 provided for the protection of a part of the Greek debt.
“Therefore, a certain part of the Greek debt is not affected at all by these latest movements in the markets. There are safeguards and I am not worried that rising interest rates around the world will lead Greece to a particular problem,” said Regling.
He said, finally, that it is important for Greece to continue the necessary reforms to strengthen and grow. The Recovery Fund is the right framework, he added, stressing that “Greece has made very strong commitments for long-term reforms and at the same time for a prudent fiscal course”.
He also said that the Greek Minister of Finance confirmed today to the Eurogroup that there will be a primary surplus in Greece from next year.