Enhanced surveillance exit

Greece is set to emerge this summer from the enhanced surveillance status it has found itself in since the end of the bailout period in 2018, European Commission Vice President Valdis Dombrovskis suggested on Friday, noting that the country is well on its way to that milestone.

Addressing reporters after discussions with Finance Minister Christos Staikouras, the Latvian politician said the decision will be made by the eurozone finance ministers in June, but he estimates that Greece “will manage to exit the enhanced surveillance in the summer.”

Earlier Dombrovskis had announced to Prime Minister Kyriakos Mitsotakis that the tranche of 3.6 billion euros from the Next Generation EU fund had just been approved for disbursement.

The Commission VP observed Greece is advancing well in the implementation of reforms, and it is based on that that decisions will be made by the ministers in June: “Greece has never faltered in its reform efforts, despite Covid and now war in Ukraine. I have every confidence that Greece will keep up the reform momentum. This will be the basis to transit out of enhanced surveillance this summer,” he tweeted.

He further suggested that the two outstanding installments from the Greek debt easing procedure, each one amounting to €750 million, will be disbursed separately: the first one this June and the second by year-end.

Regarding the return to primary budget surpluses and the target for 2.2% of gross domestic product next year, Dombrovskis said that the process for setting the 2023 fiscal targets will have to factor in the new realities the war has created, and in general the international economic developments. He did add, however, that it remains important for Greece to present a reliable strategy for the reduction of its deficits and debt.

As for the get-out clause on the budget targets, Dombrovskis said the decision originally made was for that not to apply in 2023, but it will be reviewed after the Commission’s spring forecasts on May 16.