EU agrees to end excessive deficit disciplinary procedures against Greece

26 Sep 17

The European Union decided on Monday to close the ‘excessive deficit procedure’ against Greece after the country’s improvements in its fiscal position and overall economic recovery.

The decision was based on Greece's efforts to consildate its public finances and its progress in implementing the European Stability Mechanism (ESM) support programme, which provides financial assistance to euro zone countries. 

Pierre Moscovici, commissioner for economic and financial affairs, taxation and customs, said: “Today’s [Monday’s] decision by the [EU] Council is recognition of the tremendous efforts and sacrifices the Greek people have made to restore stability to their country’s public finances. 

“The turnaround since 2009 has no parallels in Europe.”

The Greek government's balance improved from a deficit of 15.1% in 2009 to 0.7% in 2016, which is below the 3% threshold set out by the Treaty on the Functioning of the European Union. 

Earlier this year, the Greek economy slipped back into recession, as the government cut its 2017 growth outlook from 2.7% to 1.8%.

But, according to the spring 2017 economic forecast, Greece’s fiscal performance is expected to be strong this year, with the deficit expected to remain below the 3% threshold.

“We now need to ensure there is constructive cooperation between all institutions and the Greek authorities to ensure a smooth and swift conclusion of the third review,” Moscovici said. 

“That will pave the way for a successful conclusion of the programme next summer and for the opening of a new and optimistic chapter for Greece and for the euro area as a whole.” 

France, Spain and the United Kingston are the last three EU countries to remain under the Stability and Growth Pact, compared to 24 countries during the financial crisis in 2011. 

The pact is a set of rules to ensure that EU member states pursue sound public finances and coordinate their fiscal policies. 

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