“Greece continues to face excessive imbalances”, but vulnerabilities appear to be receding, partly due to policy progress, the European Commission points out in its recommendations on Greece’s fiscal policy, as part of the European Semester.

More specifically, the Commission recommends ending the energy support measures valid until the end of 2023, using the relevant savings to reduce the budget deficit.

In the event that renewed increases in energy prices require support measures, the Commission recommends that these measures aim to protect vulnerable households and businesses, be affordable and maintain incentives to save energy.

For 2024, the Commission calls for ensuring a “prudent fiscal policy” by limiting the nominal increase in nationally financed net primary expenditure to no more than 2.6%.

According to the Commission, there is also a need to maintain nationally funded public investments and ensure the effective absorption of grants from the Recovery and Resilience Facility (RRF) and other EU funds, in particular to promote the green and digital transition.

For the period after 2024, the Commission recommends that Greece continue to pursue a medium-term fiscal strategy of gradual and sustainable consolidation, combined with investments and reforms that contribute to higher sustainable growth and the achievement of a prudent medium-term fiscal position.

Building on the reforms carried out as part of the recovery and resilience plan, the Commission recommends a more investment-friendly tax system by introducing an advance tax system, broadening the tax base, including revising the current tax structure for the self-employed and enhancing tax compliance by expanding the use of electronic payments. It is also recommended to maintain and increase the autonomy of the tax authority by expanding its mandate for the development and management of information systems and its human resources.

In addition, the efficiency of the public administration is considered important, while ensuring that it can attract the right skills and maintaining consistency with the single pay scale. It is also recommended to continue the reduction of non-performing loans and to further improve the operation of the secondary market of non-performing loans.

Regarding the implementation of the Recovery and Resilience Plan, the Commission calls for its “dynamic” and “steady” implementation to be maintained, and for the rapid completion of the REPowerEU energy chapter, with a view to its rapid start-up. The continuation of the rapid implementation of cohesion policy programs is also requested, in close complementarity and synergy with the recovery and resilience plan.

Regarding energy, the Commission recommends reducing dependence on fossil fuels and further accelerating the diversification of energy supply routes. “Further expanding the development of renewable energy sources by completing and enforcing the new legal frameworks for the licensing process and for offshore wind farms, increasing the electricity grid and storage capacity, promoting decentralized renewable energy production and establishing legislative frameworks for renewable hydrogen and biomethane production.

Furthermore, in order to ensure adequate and equal access to health care, the Commission calls for the development of the primary care framework to be completed and stronger incentives to be adopted to register a sufficient number of family doctors in order to achieve full population coverage. Finally, the need to complete the land registry reform with the completion of land registration and the establishment and operation of the Hellenic Land Registry Organization is highlighted.