The European Stability Mechanism notes that the government has provided extensive support to households, workers and businesses with one of the largest budget packages in the Eurozone
Greece achieves several important milestones of the reform agenda, says the European Stability Mechanism (ESM) in his report for 2021which was approved at today’s annual meeting of its Board of Directors.
In particular, it notes the implementation of the new bankruptcy framework, further progress in privatizations, mainly in the work of utilizing Elliniko, the adoption of an ambitious strategic plan to strengthen the governance of state-owned enterprises and the improvement of fiscal discipline.
However, he adds, there have been delays and obstacles to promoting some reforms, such as the plan for the zeroing in 2021 of overdue liabilities of the State to individualsnot related to pensions.
Greece has made further progress in implementing its reform commitments and, as a result, has received its fifth and sixth half-yearly debt relief installments. totaling 1.5 billion euros.
The report emphasizes that the Greek economy recovered strongly in 2021, recording a recovery rate of 8.3% and virtually covering the losses that occurred the previous year due to the pandemic.
It also notes that the government has provided extensive support to households, workers and businesses with one of the largest budget packages in the Eurozone and that thanks to rapid debt growth decreased to 193.3% of GDP from 206.3%.
For the banks it states that they have reduced the percentage of their non-performing loans by more than 50% at 12.8% at the end of 2021. He notes, however, that high private debt remains and stresses the need for an effective enforcement framework
The report notes that in the short term Greece has a comfortable liquidity position, stable access to markets, low financing needs that reflect the low average debt maturity period and significant financial support from the Recovery Fund and the European budget (NGEU).
In the long run, however, he notes that “Greece remains vulnerable due to macroeconomic imbalances, especially its very high public debt as well as the persistent investment gap, low productivity and high NPLs (non-performing loans)”.
To address these weaknesses, “Greece has embarked on an ambitious journey to modernize its economy”, with reform priorities including addressing long-term weaknesses in infrastructure, education and skills as well as public administration, including the system. justice, the report adds.
The ESM notes that the war in Ukraine casts a shadow over Greece’s economic prospects, the magnitude and impact of which remains to be seen, adding that Greece could be affected “given its dependence on tourism and Russian oil and gas imports.” ».
