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The Greek economy still faces “excessive imbalances” such as a high public debt, unemployment and a high rate of non-performing loans, despite progress made in the last few years, the European Commission said in its Enhanced Surveillance Report published on Wednesday.
In their report, Greece’s lenders raise nine objections to the proposal tabled by the Greek government, with one of them being the new framework to protect main residence from foreclosure, when mortgages are non-perfoming. The payment culture in Greece needs to be improved,” the report says.
Quotes by EU Commission Vice-President Valdis Drombrovskis and Financial Affairs Commissioner Piere Moscovici.
We fully share the objective of the Greek authorities to protect the most vulnerable households. However, currently a proposal of the Greek authorities for a new system of protection of primary residences raises concern.
— Valdis Dombrovskis (@VDombrovskis) February 27, 2019
Concerning #Greece, the second enhanced surveillance report published today shows significant progress but also some areas in which further efforts are needed, and I urge the authorities to complete these in time for the next #Eurogroup
— Pierre Moscovici (@pierremoscovici) February 27, 2019
The European lenders’ report, the first after Greece exited the bailout program in August 2018, sees progress, however, it notes that the country still faces “excessive imbalance.”
The liquidity situation of Greek banks has improved and the reduction of non-performing loans has continued.
The Commission said further that Greece’s “excessive imbalances” were related with high public debt, a negative external position, a high non-performing loans rate set in a framework of high – albeit declining – unemployment and low growth prospects.
Greece managed to successfully exit the support programme of the European Stability Mechanism (ESM) in August 2018, after making significant improvements in the last few years, the report said, adding that there were still large imbalances, including an extremely negative international position in net investments, which continues to deteriorate amid a moderate increase of nominal GDP and a negative current account balance.
According to the report, the Greek financial sector remained vulnerable due to a very large number of non-performing loans and low profitability, hindering credit expansion and a recovery of investments. It added that private debt was falling and active deleverage was continuing.
The Commission report said that Greek authorities have pledged to ensure the continuation and completion of reforms monitored in the framework of an enhanced post-programme surveillance of the country.
A new evaluation of whether Greece has complied with the lenders’ demands is expected at the next Eurogroup, on March 11.
The report shows that next to Greece also Cyprus and Italy face “excessive imbalances”, while another 10 faced “imbalances.” These are: Bulgaria, Germany, Spain, France, Croatia, Ireland, Holland, Portugal, Romania and Sweden.
with amna and other sources
PS To quote form a famous theater play:
– “The same lenders’ procedure with Greece as in the last 9 years?”
– “The same procedure as every year, James.”
The post European Lenders: Greece has made progress, but… faces “excessive imbalances” appeared first on Keep Talking Greece.
