Greece is in the final stretch before it successfully exits the financial assistance programme, reaching the end of a long voyage, European Commission Vice President Valdis Dombrovskis said on Thursday, addressing an Economist conference in Athens.
“In fact, it is the citizens of the country that we have to congratulate,” he said, adding that “in recent years, unprecedented reform efforts have been made to meet the challenges, which have been supported by the solidarity of the Europeans. We stood and stand at Greece’s side.”
Greece was currently foremost in the EU in terms of expected investments from the European Strategic Investment Program relative to its GDP, he said, and one of eight euro-area countries expected to have a budget surplus in 2018. “We are seeing fiscal space generated over time,” he noted, adding that this was a positive development and that “the details of its implementation should be discussed.”
According to the Vice-President of the Commission, significant work is being done before the next Eurogroup in order to reach an agreement. Describing the next steps until the end of the programme, he said there were three critical elements: a successful completion of the fourth programme review, an agreement on debt relief measures that will be frontloaded, to ensure Greece’s gradual return to markets, and an agreement on the post-programme framework, since Greece must “remain on a reform track”.
Dombrovskis said that Greece should stick with primary surplus targets of 3.5 pct of GDP until 2022, after which the targets can be lowered to around 2 pct, as “given the debt, there is limited room for movement.” Finally, he referred to the need to ensure substantial growth rates, noting that would be achieved by:
a) Financial stability, budgetary discipline and strong financial institutions, able to finance the real economy.
b) Financial resilience and investments (strong institutions such as the judiciary, favourable conditions for investment, education and innovation).
c) Justice, so that the benefits of growth can reach all citizens.
At the same time, he referred to positive economic developments in Europe in terms of growth and declining unemployment and noted that the next European summit must make decisions for reforming the EU.