The Commission blocks the 1 billion euro installment in Greece

Regarding the return of the Greek SMP and ANFAs earnings of € 1bn, in the second review of enhanced post-mortem surveillance, the Commission found that there are no conditions for disbursement of the installment. 

Also, exposure to large-scale wounds shows banks, investment, productivity and poor growth. 

Indeed, the disagreements with the Commission on tax and insurance debt plans with the Commission seem to be blocking the regulation of 120 installments for debts to the funds, while a corresponding arrangement on tax debts has already been blocked. As the Commission notes, the Greek government has informed it that it does not intend to make any changes to the debt-installment plans in the near future as it will proceed with further technical analysis and processing. For its part, the Committee stresses the importance of avoiding risks to public revenue and of safeguarding the payment culture, as these were the main objectives of the adjustment programs.

The report says that although Greece managed to successfully complete the support program for the European Stability Mechanism in August 2018, with significant improvements in recent years, major imbalances remain, “including a profoundly negative international investment position, which continues to is compounded by moderate GDP growth and the current account balance, which remains negative. “

Special mention is made of the reforms that have been left behind, stressing that they should be “sustainable”. 

“Greece continues to face major challenges related to high public debt, a negative net international investment position, a high share of non-performing loans, a high unemployment rate and low growth potential,” the Commission said.

For banks, it is noted that the financial sector is vulnerable due to a very large number of non-performing loans and low profitability, hampering credit expansion and recovery of investment.

Greece, together with Italy and Cyprus, is now entering excessive imbalances (states that have serious problems with the real economy). They are the only 3 states out of a total of 13 examined under the Eurogroup mandate. Thus, Greece will be under surveillance (through the vigilance mechanism) and in this part as it is called upon to proceed with specific corrective actions. 

The report on excessive imbalances indicates that there are vulnerabilities in Greece linked to high public debt, its negative external investment position, high non-performing loans, the deficit in the external balance in an environment of high unemployment and low growth potential . 

It is also reported in its extremely negative net international investment position, which continues to deteriorate due to the limited rate of nominal GDP growth, but the current account balance remains negative. 

The report also states that Greece has successfully managed the ESM’s adjustment program last August, that financing needs will be relatively low for at least a decade, that during the Memoranda significant measures have been taken to address many of the structural weaknesses of the Greek economy. 

With regard to debt, the report states that the pace of its reduction “depends to a large extent on the continued achievement of the agreed budgetary targets and the implementation of reforms to stimulate potential growth”.

Dobrovski: The proposal for the first residence is a cause for concern

Valdis Dobrobowsky, referring to Greece, commented that it is among the countries with excessive macroeconomic imbalances (the other are Cyprus and Italy). 

He added that while he made significant progress, the pace of some reforms is slow. At the same time, he described “a difficult task to restore the banking sector”. 

Finally, he said “Greece’s proposal for the first residence continues to raise concerns. We share the intention to protect weak households but technical issues (temporary nature) must be resolved “.

Moscovice: Greek-Eurozone common interest to disburse 1 billion on March 11

The view that it is in the “public interest” of Greece and the eurozone to agree to disburse one billion euros on March 11, said the Commissioner for Economic Affairs, in reply to a question.

“All actions must have been fulfilled. The Eurogroup will decide whether this happens and I think it is better for Greece to be disbursed dose of about one billion. On March 11, “noted P.. Moskovisi, adding that this will be the message to the Greek authorities during his visit tomorrow in Athens. 

“We must continue to work together. There has been great progress in recent weeks left this last, usual process by which Greece will become the next few days, “he said and pointed out that it remains just under two weeks for the Eurogroup of 11 March. 

“It is feasible and I believe it is to the common benefit of Greece and the eurozone,” he said, and refused to speculate on what to do if this was not possible. “We have a common interest. But to achieve this goal, work needs to be done with seriousness and completeness, “he concluded.


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