The Enhanced Surveillance Report for November 2020 is the fifth positive report by Greece’s creditors in a year or so, Greek Finance Minister Christos Staikouras said on Wednesday.
The European Commission recognizes the government’s in the midst of the coronavirus pandemic, he noetd, and the “timely and responsible stance the Greek government held against economic and social repercussions of the pandemic.”
It also notes the significant recession to be recorded this year due to the significant portion of tourism in the GDP and the structure of the economy, but it does see a strong revival of the economy in 2021, he added. The rise of unemployment his year will not be as sharp as that in other EU member states, due to the government’s measures, and is also expected to improve in 2021, Staikouras asserted.
The report acknowledges the timely and responsible stance of the Greek government towards the economic and social impact of the pandemic and confirms the speed and adequacy of economic support measures taken for households and enterprises, worth 24 billion euros. It also underlines the contribution of these measures towards a faster restart of the economy, protecting job positions and the sustainability of enterprises.
The report also highlights the big progress made in implementing significant structural reforms, such as a new bankruptcy law and other government initiatives to deal with structural weaknesses. It also highlighted the unprecedented decline in borrowing costs in recent months and a successful round of debt issue which significantly raised the country’s cash reserves.
It underlined the importance of a rational use of funds secured from a Recovery Fund, through implementing investments and reforms and to help the Greek economy to recovery in a sustainable and rapid way.
The report gives the green light for the release of the next set of policy-contingent debt measures worth 767 million euros, in the framework of a Eurogroup June 2018 agreement which includes the transfer of income equivalent amounts stemming from central banks’ holdings of Greek government bonds under the Securities Markets Programme and the Agreement on Net Financial Assets. It also includes a waiver for the step-up interest margin for certain loans provided by the European Financial Stability Facility.
The third tranche of policy-contingent debt measures was released following the Eurogroup on July 11, 2020, inter alia based on the assessment of the implementation of Greece’s commitments for end-2019 included in the enhanced surveillance report adopted by the Commission on 20 May 2020, and considering the extraordinary circumstances posed by the coronavirus outbreak.