Eurogroup: “The release of the final tranche for Greek debt relief marks the end of discussions since June 2018”
“Historical moment” was described in the Eurogroup the release of the final tranche for Greek debt relief.
The release of the final tranche of Greek debt relief measures agreed by the Eurogroup on Monday marks the end of regular discussions on measures subject to debt policy since June 2018, the finance ministers of the eurozone emphasize in their statement on Greece.
Today, the Eurogroup discussed Greece’s progress with concrete reform steps agreed between the European institutions and the Greek authorities to be completed by the autumn of this year, based on the first Post-Programme Surveillance report, following the end of Enhanced Surveillance for Greece in August 2022. As agreed by the Eurogroup on 16 June 2022, this first Post-Programme Surveillance report also serves as a basis for deciding on the release of the final tranche of the policy-based debt measures agreed in June 2018.
The Eurogroup welcomes the further policy reforms achieved following the publication of the final enhanced supervision report on 23 May 2022. In particular, it welcomes the fulfillment of specific commitments in the area of tax collection, cadastral and forest maps, health care, insolvency and public enterprises. In addition, the Eurogroup emphasizes that “the Greek authorities have achieved tangible acceleration in clearing arrears and outstanding liabilities, although further work is required to clear legacy reserves as well as to clear state guarantees.”
The Eurogroup welcomes the assessment by the European institutions that, despite the difficult circumstances due to Russia’s war of aggression against Ukraine, Greece has taken the necessary steps to fulfill its specific commitments and that the necessary conditions are in place to confirm disengagement of a final tranche of policy-dependent debt measures.
Subject to the completion of national procedures, the Euroworking Group and the Governing Council of the European Financial Stability Facility (EFSF) are expected to approve the transfer of equivalent amounts of SMP-ANFA income, the reduction to zero of the interest margin for some EFSF loans for the second half of 2022 and the reduction to zero of the aid margin from 2023 onwards.
The Eurogroup underlines the need to continue decisively addressing the existing mid-term risks and challenges identified in the first Post-Program Oversight report, including the effective functioning of the secondary NPL market, primary care reform, labor law codification, ongoing financial sector reforms, arrears clearance, pending household insolvency cases and government guarantees, as well as the implementation of the Sale and Lease Back Agency to ensure the full implementation of the insolvency framework.
Finally, the Eurogroup emphasizes that the implementation of Greece’s Recovery and Resilience Plan reforms and investments will continue to provide a significant boost to the economy, as well as a strong catalyst for efforts towards a green and digital transition. “We welcome the commitment of the Greek authorities to continue the reform process, and in particular their willingness to quickly ensure the smooth functioning of the secondary market for non-performing loans, and in this regard, we look forward to the second Post-Program Monitoring report, which is expected to be published on spring 2023. From now on, the continued implementation of an ambitious growth strategy and prudent fiscal policies will continue to be the key ingredients for debt sustainability,” the Eurozone Finance Ministers emphasize.
Pascal Donahue: “Historic decision”
“Historical moment” characterized the decision of the Eurogroup to release the last installment of the Greek debt relief measures to Greece, the president of the Eurogroup, Pascal Donagiou.
During a press conference, shortly after the conclusion of the Eurogroup, Pascal Donahue emphasized that the discussion took place in the context of Post-programmatic Supervision, since as he said the Greek economy and the Greek government succeeded in exiting the Enhanced Supervision program. “We hope that this will be the last time that a Eurogroup statement was approved specifically in relation to Greece”, said P. Donahue, stressing that today’s important and “historic” decision was supported by all the finance ministers of the eurozone, as all the conditions to release the last installment of the Greek debt relief measures. This is the release of an amount of 725 million euros in 2022 and the zeroing of the interest rate increase margin in certain loans of the European Financial Stability Facility (EFSF).
“Greece is now firmly on its feet and as a member of the European family now participates in the formal and common procedures of fiscal economic coordination of the EE”, said P. Donahue at the end.
For his part, the new managing director of the European Stability Mechanism (ESM), Pierre Gramenia, emphasized that today’s decision is “historic”, because “after four years, Greece has done much better than we expected.” He recalled, in fact, that back in 2018, many doubted that Greece could fulfill this ambitious program.
Pierre Gramenia said that the Greek debt relief measures approved today by the Eurogroup amount to a total of 6 billion euros. He also added that the Greek finance minister informed that the reduction of Greece’s debt will be faster in the entire eurozone. “We know that Greece is fully committed to continuing to implement its program. As managing director of the ESM, I remain in close contact with the Greek government,” added Pierre Gramenia.
Staikouras: “A landmark decision”
“The Eurogroup, in today’s meeting, took a landmark decision for Greece”, points out in a statement Christos Staikouras.
“A decision that recognizes that, following the exit from the regime of enhanced supervision last August, a new chapter has opened for the country and our economy – despite multiple, exogenous crises – records a positive course and auspicious prospects. A decision that certifies that Greece, amidst adverse – internationally – conditions, continues with consistency and efficiency the implementation of reforms and the implementation of the National Recovery and Resilience Plan. A decision that rewards the intensive and systematic work of society and the state, through the activation of the last installment of the agreed Greek debt relief measures.
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