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Economy

EU Commission: Greece Has Taken All Steps to Achieve Agreed Commitments, Despite Virus

November 18, 2020

BRUSSELS — Greece has made stepped up the pace of reforms and the government is advancing a number of flagship privatisations, despite the challenges posed by the pandemic, the European Commission noted on Wednesday. It thereby provides a basis for the Eurogroup to discuss the release of the next tranche of policy-contingent debt measures, amounting to 767 million euros, it concluded in the Enhanced Surveillance Report for November 2020.

In spite of the recent surge in infections, Greece has to date managed to contain the spread of the coronavirus comparably well, also thanks to a timely response in regions facing an increase in the number of new cases, according to the Commission's report. It noted that Greek authorities are strengthening the preparedness of the healthcare system and expanding the testing capacity, while at the same time expanding and adapting the set of fiscal and liquidity measures aiding persons and businesses affected by the pandemic.

These measures help cushion the social and economic cost of the pandemic, but according to the Commission 2020 autumn forecast, the Greek economy is still expected to suffer one of the largest falls in economic activity in the EU, on account of its high exposure to tourism and the large share of small enterprises, which have a limited adjustment capacity. The three-week national lockdown announced on November 5, and its potential prolongation depending on the evolution of the pandemic, could weaken the near-term outlook more than currently assumed, the report said.

Despite the very challenging circumstances, which necessitated a focus on more immediate priorities, the report noted that Greece has significantly stepped up the pace of reform implementation in the past months. Most importantly, it cited the insolvency code adopted in the Parliament.

"This is a major reform of the insolvency framework, which is expected to facilitate the resolution of key challenges in the financial sector. The authorities are currently preparing secondary legislation, which will define important aspects of the new framework, and are in parallel developing the infrastructure, both of which are necessary for the code’s effective implementation as from 1 January 2021. A long-standing bottleneck to the human resources reform of the Independent Authority for Public Revenues is being addressed through the agreement to go ahead with its supplementary wage legislation, which will enhance its capacity to attract and maintain high calibre staff. The authorities are also advancing on a number of flagship privatisation transactions," the report said.

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