Greek Finance Minister Christos Staikouras welcomed a high-profile Eurogroup decision on Monday to activate debt relief measures for Greece worth six billion euros.
“This decision acknowledges that following the country’s exit from the enhanced supervision status in August, a new chapter for the country and our economy – despite multiple external crises – with a positive course and favorable prospects has opened,” Staikouras said. He added that the closely watched decision confirms that Greece continues to consistently and efficiently to implement reforms and its National Plan for Recovery and Resilience.
Staikouras said the Athens will continue working with a plan, being fully aware of the difficulties, in order to make the country stronger and its economy more dynamic, productive, extroverted and socially just.
The Eurogroup decision releases the eight and last tranche of profits generated by Greek bonds (ANFA/SMP) held by the ECB and Eurozone member-states central banks. The last surveillance report had been pending since the first half of 2019 and had been delayed due to snap elections held in Greece in July of that year.
In a statement, the Eurogroup noted that:
“Today, the Eurogroup discussed Greece’s progress with specific reform steps agreed between the European institutions and the Greek authorities to be completed by the autumn of this year, on the basis of the first post-programme surveillance report published on 22 November 2022, following the end of enhanced surveillance for Greece in August 2022. As agreed by the Eurogroup on 16 June 2022, this report also serves as a basis for a decision on the release of the final tranche of policy-contingent debt measures agreed in June 2018.
The Eurogroup welcomes the further policy reforms achieved since the final enhanced surveillance report was published on 23 May 2022. In particular, we welcome the fulfilment of the specific commitments in the area of tax collection, cadastral mapping and forest maps, health care, insolvency and state-owned enterprises. Moreover, the Greek authorities have achieved a tangible acceleration in the clearance of arrears and backlogs, although further work is needed to clear legacy stocks as well as for the state guarantees clearance.
Against this background, the Eurogroup welcomes the assessment by the European institutions that, despite the challenging circumstances due to Russia’s war of aggression against Ukraine, Greece has taken the necessary actions to complete its specific commitments and that the necessary conditions are in place to confirm the release of a final 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, the reduction to zero of the step-up interest margin on certain EFSF loans for the second half of 2022, and the reduction to zero of the step-up margin from 2023 onward.
The global instability created by the war in Ukraine underscores the need to continue tackling decisively the existing medium-term risks and challenges identified in the first post-programme surveillance report, including the effective functioning of the non-performing loan secondary market, the primary health care reform, the codification of the labour legislation, ongoing reforms in the financial sector, the clearance of arrears, legacy backlogs of pending households insolvency cases and state guarantees, as well as the implementation of the Sale and Lease Back Organisation to ensure the full implementation of the insolvency framework. Moreover, the implementation of the reforms and investments of Greece’s Recovery and Resilience Plan will continue to provide an important impulse to the economy, as well as a strong catalyst for efforts towards the green and digital transition. We welcome the commitment of the Greek authorities to continue the reform process, and in particular their willingness to swiftly ensure the smooth functioning of the secondary market for non-performing loans, and in this regard, we look forward to the second post-programme surveillance report, which is expected to be published in spring 2023. Going forward, the continued implementation of an ambitious growth strategy and of prudent fiscal policies will continue to be the key ingredients for debt sustainability.
The implementation of specific reform commitments as well as the release of the final tranche of policy-contingent debt-measures, as agreed today, marks the end of the regular Eurogroup discussions on policy-contingent debt measures as of June 2018.”
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