Commission Commends Greece, Paves Way for €767m Tranche

Photo Source: @European Commission

The European Commission (EC) commended Greek authorities for moving ahead with reform commitments despite the extraordinary circumstances posed by the coronavirus outbreak, paving the way for the release of a new tranche of debt relief agreed to as part of Greece’s post-bailout program.

“In spite of the adverse circumstances caused by the pandemic, Greece has taken the necessary actions to achieve its due specific commitments,” said the 8th enhanced surveillance report for Greece presented by the European Commission this week.

The announcement is recognition and the result of hard and systematic work, said Greek Finance Minister Christos Staikouras, adding that he is particularly pleased that the Commission recognizes the effort made in the field of economy, an effort also acknowledged by international markets, credit rating agencies, and Greek society.

The Eurogroup is now expected to approve debt relief measures worth 767 million euros by November 30.

More specifically, the report points to a slump in the Greek economy impacted by the coronavirus in the first half of 2020, but adds that authorities managed nonetheless “to restart the work on the commitments in the past months and delivered on a number of fundamental reforms”.

“This is the fifth positive assessment of Greece’s progress in implementing reforms in a little over a year, and the third during the unprecedented global conditions caused by the pandemic,” said Staikouras.

Greek Finance Ministr Christos Staikouras. Photo source: @cstaikouras

The report goes on to predict a strong economic recovery for Greece in 2021 after a significant recession this year, mainly due to the contribution of the Covid-hit tourism sector to GDP.

It also forecasts an increase in unemployment for this year and a significant decline in 2021, and reflects the progress made in implementing important structural changes, including the new debt settlement law which has had a positive impact on the investment environment.

Finally, said Staikouras, the Commission is recommending the disbursement of the 4th instalment of profits generated by Greek bonds held by the ECB and Eurozone members’ central banks (SMPs and ANFAs) as collateral for loans to Greece.