EU Is Said to Acknowledge That Greece Put Budget House in Order

by Dramelin 4:00 AM 0 comments

The European Commission is expected to announce on Wednesday that Greece’s budget is back in line with euro-area standards, bolstering the nation that received its latest round of rescue aid earlier this week, as it mulls its first bond sale since 2014.
The commission, the EU’s executive arm, will recommend the removal of its so-called excessive deficit procedure for Greece, a step taken when a member state’s budgetary shortfall gets to big, according to a person with knowledge of the action, who asked not to be named because it hasn’t been announced yet.
While largely symbolic, the decision will mark an important step for Greece, which has been relying on international bailouts to stay afloat since 2010 as it seeks to return to normalcy and regain investors’ confidence.
The recommendation, which has to be approved by EU governments, has no practical implications as Greece’s fiscal targets are dictated by its bailout program, which prevails over EU rules.
But the official recognition that the Athens has gotten its finances in order and is no longer in breach of EU rules would add to a series of positive news surrounding the country and its bailout.
Recovery Milestone It also marks a milestone for the EU: if Greece exits the procedure, only three countries would remain under the so-called corrective arm -- France, Spain and the U.
-- down from 24 countries during the financial crisis in 2011.
EU rules stipulate that countries are supposed to limit budget deficits to 3 percent of gross domestic product and keep their debt ratios below 60 percent.
Greece’s deficit has been reduced from a peak of 15.
1 percent of gross domestic product in 2009 to a surplus of 0.
7 percent of GDP in 2016.
Euro-area finance ministers agreed last month that Greece had undertaken enough economic reforms to get 8.
7 billion) in additional financial aid under its 86 billion-euro bailout, while offering more clarity on what future debt relief for the crisis-ridden state could entail Under the terms of its bailout, the country must sustain a primary surplus -- which excludes interest payments -- of 3.
5 percent of GDP until 2022, and stabilize around 2 percent in the medium term.