22112017Headline:

EU Commission report praises Greece’s implementation of ESM bailout programme

The European Commission has praised Greece’s implementation of the European Stability Mechanism (ESM) programme in its 187-page background report on the first and second reviews of the programme released on Monday.

The report noted that Greece has made significant reform efforts across all policy areas during the first two-thirds of the ESM programme, while stressing that reforms must continue during the remainder of the programme and after its end in August 2018.

“Efforts will have to continue and implementation will be the cornerstone of the remaining year under the ESM programme…many reforms to address underlying structural weaknesses and “stock” problems (such as the high level of NPLs) will require further sustained efforts to be completed, both during the remainder of the programme and beyond,” the report concluded.

“Continued implementation of policy conditionality on the ground, with full commitment and ownership across all parts of the administration, will remain key to ensure a successful completion of the programme,” it added.

It also urged Greece to build on the “massive efforts undertaken so far” to establish full policy credibility, underpin confidence and nurture a positive investment climate going forward.

“This will be critical to put the economy back on its feet again and emerge from the need for financial assistance after eight years, laying the basis for a return to sustainable growth and market access.”

The Greek economy remained more resilient than expected in a difficult environment, the report said, while fiscal targets have been widely outperformed, and “gamechanging structural reforms in areas such as tax administration, the business environment, energy, privatisation and public administration have been launched.”

Real GDP started to recover on a quarterly basis in mid 2016 but the “recovery remains fragile” and would largely depend on implementation of the programme, the report said.