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How Greece passed the evaluation of the institutions comfortably

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How Greece passed the evaluation of the institutions comfortably

The Greek government received a positive assessment in the course of the implementation of the reforms in the context of the 11th evaluation of the country's economy under a regime of enhanced supervision. The European Commission published the “rating” of Greece by the institutions and brought smiles of optimism to the financial staff of the government.

In the assessment, the government praised the measures to support the Greek economy, while the new analysis of Greece's debt sustainability is improved compared to the June measurements.

Where is Greece doing well?

According to the assessment, the economy is showing signs of recovery earlier than expected, despite the restrictive measures. The evaluation refers to the “Greece 2.0” plan and emphasizes that “it will play a key role in helping Greece emerge stronger from the pandemic.”

Regarding the impact of the pandemic on the financial sector, the assessment states that it was “moderate so far, thanks to the measures taken by the Greek authorities, but also to the initiatives taken at the level of the eurozone”.

In particular, at the level of reforms it is stated that:

– Significant and substantial progress has been made regarding the privatizations, especially in the emblematic work of Elliniko, in Egnatia and DEPA, while the moves in the OASA are progressing.

– The salary adjustments in AADE have been completed.

– The contract on the full development of the information system for investment licensing was signed.

-The contract for the codification of the legislation was awarded.

At the same time, the new information system of the tax administration is expected to enter into force by the end of 2021, the clawback is proceeding according to schedule, while regarding the business and investment environment, steps have been taken, but what was voted in April must be implemented. and in June.

At the same time, the Land Registry is progressing satisfactorily, while after the recent labor reform, a draft of a new labor code is expected to be presented by the beginning of 2022.

In the field of justice, the progress regarding the electronic submission of files is characterized as satisfactory, as well as many interventions that will be made in the framework of “Greece 2.0”.

Where work is still needed

On the other hand, there are areas where Greece must “run” faster.

The main area is that of overdue debts. Indicatively, the assessment states that the total stock of overdue debts “reaches” 900 million euros, exceeding the total target at the end of July (which was around 500 million euros) by almost 80%.

Delays are also recorded in environmental inspections, but also in higher education and health supplies.

At the same time, budgetary risks are identified that “remain significant” and are mainly related to the evolution of the pandemic and pending court decisions.

Risks, moreover, stem from the possibility of losing guarantees in the coming years. But also because of the pending court decision on retrospectives which “could lead to further significant payments”.


Marginal debt improvement

For GDP, the report reiterates the forecast for June, ie GDP growth of 4.3% in 2021 and 6.0% in 2022. government support measures.

In the debt sustainability analysis, the baseline scenario has improved marginally compared to the 10th report. This is because the cost of borrowing has decreased. Specifically, in the baseline scenario, debt is reduced to 57.6% of GDP by 2060, while gross financing needs remain below 15% of GDP in the long run.

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Source: politis.com.cy

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