The Eurogroup on June 16 is expected to give the "green light" for Greece's exit from the status of enhanced surveillance and return to "European normalcy." The political approval of the exit process, which is expected to take place on August 21, marks the official end of the memorandum period for Greece.
This does not mean that the monitoring by the European institutions will stop, since it will continue until 2059, ie until the country repays 75% of the loans it received under the memoranda. However, the economy will go through a phase of simple post-programme monitoring, similar to what is followed today in Ireland, Spain, Cyprus and Portugal, while an evaluation of its course will be carried out every six months, instead of every quarter that was the case until today.
The Eurogroup's approval for Greece's exit from the status of enhanced surveillance will activate the disbursement of a 748-million-euro installment. At the same time, however, the "road map" of the prerequisites will be finalized, which will have to be implemented in 2 phases, one by August and one by the end of October.
OECD: Greek economy to grow by 2.8% in 2022, 2.5% in 2023
The Greek economy is expected to grow by 2.8% this year and 2.5% in 2023, the Organisation for Economic Cooperation and Development (OECD) said in its Economic Outlook report released on Wednesday.
The Paris-based organization said that the recovery is expected to slow in 2022. Surging global prices, heightened uncertainty and tightening monetary conditions will be partly offset by disbursements of Greece’s recovery and resilience plan, fiscal support to households and firms, and rising exports and investment.
Employment growth is expected to pause temporarily as employers face higher uncertainty, difficulties in hiring workers with relevant skills and rising wages. While supply pressures have risen, remaining spare capacity will dampen price pressures.
More specifically, the OECD said that revenues buoyed by rising prices and the recovery will help the government return the budget to a primary surplus in 2023. Using unplanned revenues and savings to rebuild the fiscal surplus, and ensuring support measures are temporary and targeted towards vulnerable households’ income rather than subsidising prices, would further improve fiscal sustainability.
Greater fiscal sustainability, along with resolving banks’ remaining non-performing loans, would support Greece achieving an investment-grade sovereign debt rating, improving access to finance. While Greece is shifting its energy supply from Russia, improving energy efficiency and developing renewable sources would support long-term energy security and sustainability.