EU to end review of Greek economy after 12 years of turmoil

The European Commission is to end its scrutiny of Greece’s economy, marking the end of a debt crisis triggered by the global financial turmoil of 2008 that nearly pushed the country out of the eurozone.

In a letter to Greece’s Finance Minister Christos Staikouras on Wednesday, EU Economics Commissioner Paolo Gentiloni said Greece had “honoured the essential political commitments” made to the Eurogroup by 19 eurozone member states. euro and “achieved an effective implementation of reforms” despite the impact of Covid-19 and the war in Ukraine.

Staikouras said on Twitter that the announcement “marks the achievement of a major national goal for Greece”.

Following the financial crash of 2008, Greece was plunged into a debt crisis that led to bailouts by the EU and IMF from 2010. In the decade that followed, the economy of the country contracted by a quarter and the disposable income of Greek citizens fell by a third. on the back of austerity policies imposed by the so-called “troika” of institutions which included the commission, the IMF and the European Central Bank.

Thousands of young Greeks left the country in search of jobs as unemployment in the country peaked at 27.8% in 2013, while the government was forced to make drastic cuts to its welfare system. retirement and public service in exchange for financial assistance.

The commission, which monitors the budgets of the 27 member states, has overseen reforms to the Greek economy since the bailout program was launched.

The tough conditions of the bailout, largely dictated by Germany, nearly pushed Greece out of the euro zone in 2015 when then-Prime Minister Alexis Tsipras imposed the conditions on the Greek people during a Referendum. Voters rejected the terms of the aid package, but Tsipras implemented the reforms regardless.

The announcement of the end of the strict surveillance program comes as the ECB puts in place mechanisms to prevent a second collapse of the eurozone economy.

Last month, the ECB raised interest rates for the first time since 2011 and focused the reinvestment of maturing bonds on southern EU countries, including Greece.

Following the latest trip by EU officials to Athens in April, the committee noted that economic growth is expected to reach 3.5% in 2022 and 3.1% in 2023 despite continued pandemic-related uncertainty and rising energy costs.

He also said there was a “positive surprise” in the government’s primary deficit – the difference between government revenue and expenditure excluding interest payments – which was 5.5% of gross domestic product in 2021, i.e. 2.1 percentage points less than expected.

The so-called “economic adjustment programme” ended in June 2018, but Brussels has been monitoring Greece’s finances ever since.

The commission said in a statement that the risk “of ripple effects on the euro area economy has diminished significantly” and that more detailed monitoring was “no longer warranted”.

A final tranche of debt relief is due in November if Greece meets the conditions for a “post-programme surveillance” report.

In a letter responding to Gentiloni, Staikouras said Greece had implemented reforms in six key areas – fiscal policies, social protection, financial stability, labor markets, privatization and public administration – which had “put in place a flat -solid form for Greece to achieve sustainable and sustainable goals”. long-term inclusive growth”.

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