European Commission blocks 1bn-euro instalment to Greece
The European Commission blocked the disbursement of the 1-million-euro tranche to Greece after it was determined that the country had not met the agreed requirements to receive the money.
“Concerning #Greece, the second enhanced surveillance report published today shows significant progress but also some areas in which further efforts are needed, and I urge the authorities to complete these in time for the next #Eurogroup”, European Commissioner for Economic and Financial Affairs Pierre Moscovici tweeted.
The Commissioner on Wednesday said that the second enhanced surveillance report on Greece released earlier the same day showed significant progress but also some areas in which further efforts were needed, urging Greek authorities to complete these in time for the next Eurogroup on March 11.
He noted that Greece has made a significant step towards normality as it is fully included in the European Semester for the “first time” since exiting the programme.
He explained that the excessive imbalances observed are equivalent to those faced by other countries that have exited programmes, such as Cyprus and Portugal, and are indicative of the size of challenges that the Greek economy is still up against. Moscovici referred specifically to high unemployment and debt, saying that “this is something that should not surprise us.”
On the second report, he noted that “most of Greece’s commitments” have been met, including the 2019 State Budget that foresees a 3.5 pct primary surplus target, the completion of major tenders in the field of natural gas, in health and in the International Airport, the reforms in investments and the changes in the judicial system.
However, he referred to two “main outstanding issues,” which are the extension of the primary residence protection schemes and the sale of the Public Power Corporation (PPC) lignite plants, saying that it would be in Greece’s interest to complete these reforms before the Eurogroup in March.
According to Moscovici, this is the message he will convey to the Greek authorities when he visits Athens on Thursday.
As excerpts of the report noted:
Ensuring the sustainability of government debt in the medium and long term will require maintaining fiscal discipline and continuing and completing the fiscal structural reforms initiated in recent years. It will involve full implementation of the 2016 pension reform and completion of the health care reforms. Furthermore, it will include modernisation of the property tax system and usage of emerging fiscal space to shift towards a more growth-friendly tax
structure, and further improving tax collection, by enhanced operational independence of the tax authority. Finally, it will address arrears, further improvement of public financial management, and continuation of improving the management of State assets.
The report also points out that Greece’s net international investment position remains highly negative.
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