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Eurogroup
Press release
16 June 2022
17:33
Eurogroup paves way to end of Greece’s enhanced surveillance and confirms release of further tranche of debt measures
Today, the Eurogroup discussed Greece’s progress with reform implementation and its macro-economic outlook, based on the 14th enhanced surveillance report of the European Commission.
The Eurogroup welcomed the assessment by European institutions that the necessary conditions are in place to confirm the release of the seventh tranche of policy-contingent debt measures, worth € 748 million.
Given the successful delivery of the bulk of Greece’s policy commitments, ministers also welcomed the European Commission’s intention not to prolong enhanced surveillance after its expiration on 20 August 2022. This, combined with the earlier abolition of capital controls and the full repayment of the IMF loans, would restore conditions of normality in Greece for the first time since 2010.
"Eurogroup
Luxembourg, 16 June 2022
Eurogroup statement on Greece
Following the successful completion of the ESM programme for Greece in 2018, the Greek authorities
committed to continue and complete all key reforms adopted under the ESM programme and to
ensure that the objectives of the important reforms adopted are safeguarded. The Eurogroup
welcomed this commitment as well as the intention of the European Commission to activate enhanced
surveillance according to Articles 2 and 3 of Regulation (EU) No 472/2013. The Eurogroup agreed that
the quarterly reports under enhanced surveillance would serve as a basis for the Eurogroup to agree
on the return of SMP-ANFA income equivalent amounts and the cancellation of the step-up interest
margin on EFSF.
Today, the Eurogroup discussed Greece’s progress with reform implementation and its macroeconomic outlook, on the basis of the fourteenth enhanced surveillance report of the European
Commission published on 23 May 2022.
After a strong rebound of economic activity in 2021, the Commission’s spring forecast shows a
continuation of the post-pandemic recovery, albeit at a somewhat slower pace than expected, due to
the impact of the Russian military aggression against Ukraine and higher energy prices. Growth is
expected to be mainly driven by investment, and to a lesser extent by consumption and net exports.
Growth is also bolstered by the Recovery and Resilience facility and an overall supportive fiscal policy
stance this year.
The Eurogroup welcomes the further policy reforms that have been achieved since the last report was
published on 23 February 2022. In particular, we welcome the fulfilment of the specific commitments
in the area of public financial management, property taxation, disability benefits, environmental
inspections and justice, and the agreement on the extension of the mandate of the Hellenic Financial
Stability Fund. Moreover, Greece also completed wider structural reforms including in public
procurement and by setting up a Justice Statistics department at the Ministry of Justice.
Against this background, the Eurogroup welcomes the assessment by the European institutions that,
despite the economic implications of new waves of the pandemic and the new challenges posed by
Russia’s military aggression against Ukraine, Greece has taken the necessary actions to achieve its
specific commitments and that the necessary conditions are in place to confirm the release of the
seventh tranche of policy-contingent debt measures. Subject to the completion of national
procedures, the Eurogroup Working Group and the Board of Directors of the European Financial
Stability Facility (EFSF) are expected to approve the transfer of SMP-ANFA income equivalent amounts
and the reduction to zero of the step-up interest margin on certain EFSF loans, which are worth EUR
748 million in total.
The lingering uncertainty related to the pandemic as well as the global instability created by the war
in Ukraine underscore the need to continue tackling decisively the existing medium-term risks and
challenges identified in the fourteenth enhanced surveillance report, including public debt, nonperforming loans, external rebalancing, unemployment and strengthening the growth potential.
We therefore welcome the commitment of the Greek authorities to continue the reform process and
to complete outstanding elements.
The Eurogroup welcomes the Commission assessment that the successful delivery of the bulk of the
policy commitments and the effective reform implementation have improved the resilience of the
Greek economy and strengthened its financial stability, thereby significantly reducing the risks of
adverse spill-over effects on other Member States in the euro area.
The Eurogroup takes note that the European Commission may not prolong enhanced surveillance after
its expiration on 20 August 2022. Together, the eventual expiration of enhanced surveillance, the
implementation of reform commitments, the full repayment of IMF loans, and the earlier abolition of
remaining capital controls will bring to a closure a challenging period since 2010 characterised by
heightened international focus on Greek economic policies, and complete the return of Greece to the
regular economic surveillance framework. In this case, the monitoring of Greece’s economic, fiscal
and financial situation would continue in the context of both the well-established post-programme
surveillance and the European Semester. The ESM will continue its monitoring of Greece’s repayment
capacity under the Early Warning System, in line with existing arrangements. In addition, major
reforms and investments would also continue to be monitored in the context of the delivery of
Greece’s recovery and resilience plan.
The Eurogroup also welcomes the specific reform steps that have been agreed between the European
institutions and the Greek authorities to be completed by the autumn of this year, as set out in the
fourteenth enhanced surveillance report. This includes financial sector policies, justice, primary health
care, cadastre, codification of the labour legislation, and reaching the agreed targets for the clearance
of arrears. The Eurogroup concurs that the monitoring of these outstanding reform commitments
could be undertaken in the context of a first post-programme surveillance report to be issued in
November, which could serve as a basis for a decision on the final tranche of debt measures."