European Commission: The roadmap for exit from enhanced supervision

The government has turned its eyes towards the exit from the enhanced supervision – in about three months – , that will formally close the chapter of the Memoranda. The first signal is given today through the revelations of the 14th evaluation, which is the last under this strict regime.

This week has important appointments with Brussels, as within a few hours all the Member States are waiting for the package of recommendations of the European Commission on the budgets and the meeting of the finance ministers for the extension of the general escape clause until 2023.

The European Commission is expected to suggest to the finance ministers that the clause remain in force and a first discussion will take place next Tuesday at Ecofin and possibly the decision will be taken at the next meeting of finance ministers in June. The College of Commissioners decided on this proposal last week while agreeing to stricter oversight of heavily indebted countries.

The route to the exit of August

As for the latest conclusion of the lenders for our country under the regime of Enhanced Supervision, the information speaks of a positive 14th report and the fulfillment of the obligations, thus paving the way for the exit from the enhanced supervision in August.

Until the end of the enhanced supervision, Greece has to travel a period of three months. The final decisions are expected to be made in June, when the way will be paved for the disbursement of the remaining installments totaling about 1.5 billion euros.

According to information, the 14th evaluation will refer to Greece’s way out and then the finance ministers at the June meeting will also form a post-monitoring framework, where it will be linked to the last installment amount by the end of the year. .

The decision on the last disbursement is expected to be made in December, based on the first conclusion of the post-program evaluation that will be published in November. According to a report by Bloomberg, our country has fulfilled its obligations based on the latest post-memorandum evaluation. The article states that this move will mark the official end of the ten-year crisis that hit Greece.

After the end of the enhanced supervision, the monitoring will continue until Greece pays 75% of the financial assistance until about 2059. Then an evaluation will be carried out every six months, instead of the current quarter, and it is included in the status of countries with support programs such as Spain, Portugal, Cyprus and Ireland.

The clause and Greece

Today’s Eurogroup and tomorrow’s Ecofin will focus on the prospects for the European economy, the effects of the Russian war in Ukraine and the energy crisis. The suspension of the Stability Pact in 2023 is also expected to fall on the table, following the unfavorable spring forecasts of the Commission.

Extending the escape clause for another year gives the Greek government flexibility to maneuver to take extra support measures against accuracy, but fiscal flexibility is expected to be asterisked for countries with high debt.

The steps of the financial staff, however, remain cautious, as the country has a high debt which is expected to decrease to 180.2% at the end of 2022 (from 193.3% in 2021). The recently submitted Stability Program forecasts a deficit of 2% of GDP in 2022, a primary surplus of 1.1% of GDP in 2023, 2.1% of GDP in 2024 and 2.4% in 2025.