Satisfied with the budgetary seriousness and the continuation of the reforms underway in Greece, the Euro area Finance Ministers approved, on Thursday 11 June, the release of the third tranche of aid of €748 million, which will make it possible to alleviate the servicing of the Greek public debt.
This decision was taken on the basis of the sixth monitoring report on Greece's macroeconomic rescue package (see EUROPE 12491/13).
In its declaration, the Eurogroup welcomes the fact that Athens has maintained a primary budget surplus (excluding servicing of debt) for the past five years and its ability to achieve a budget surplus of 1.5% of GDP in 2019. It welcomes progress in reforms, notably in privatisation, the welfare state, the labour market and public administration, while noting a delay in the reform of the financial sector. It calls on decisive efforts to reform corporate insolvency rules and strengthen tax collection.
The seventh report from institutional creditors is expected in September.
See the Eurogroup statement: https://bit.ly/3cX4wZu
‘Almunia’ report. The permanent and temporary rescue funds of the euro area lent a total of €203.8 billion to Greece.
The European Stability Mechanism (ESM), which holds more than half of Greece's debt, on Thursday published the report led by former EU Commissioner Joaquín Almunia, which assesses the three Greek bailout packages. According to the report, the fundamental objective of maintaining the integrity of the euro area, with Greece as a member, has been achieved.
Nevertheless, Mr Almunia makes five main recommendations to improve the modalities of macroeconomic rescue packages. Foremost among these recommendations is the importance of “ownership” by all stakeholders in a country temporarily under financial trusteeship. It is essential to analyse the macroeconomic reasons that forced a euro area country to ask for help and ensure that efforts are fairly distributed to avoid unnecessary social costs”, Almunia told the press.
The former EU Commissioner also recommends a clear definition of the strategic objectives of a rescue package, better coordination of macroeconomic analysis among institutional creditors and ex-post monitoring to ensure that the recovery continues long after the end of an aid package.
Considering that the 'Almunia' report provides a good basis for reflection on how to improve the rescue packages, ESM Director Klaus Regling acknowledged the importance of “relentlessly explaining” the reasons why budgetary adjustment measures are required in exchange for financial support.
See the report: https://bit.ly/2YvfAYz (Original version in French by Mathieu Bion)