The European Commission adopted a set of measures on Wednesday (11 July) to closely monitor Greece’s fiscal policy after it concludes an eight-year-long bailout programme on 20 August, closing one of the darkest chapter’s in the single currency’s short history.
The ‘enhanced surveillance framework’ for Greece is meant to support the implementation of agreed reforms following the successful conclusion of the European Stability Mechanism (ESM) support programme, the Commission said in a statement.
It will allow the EU executive to scrutinise the commitments Greece undertook in exchange for fresh loans under the ongoing bailout programme, the third since 2010.
The move follows a historic deal reached on 22 June between the Eurogroup and Greece, which included new debt relief for Athens and a strict monitoring of how it implements the agreed reforms in the coming years.
“It is important for the country to continue with prudent fiscal and macroeconomic policies, as well as to complete the agreed reforms. Enhanced surveillance is there to help Greece build confidence with markets, investors and companies: they all want stability and predictability,” said Commission Vice-President Valdis Dombrovskis.
While Greek opposition parties have sought to portray the post-bailout surveillance as just another bailout programme, Economic and Financial Affairs Commissioner Pierre Moscovici repeated that was not the case.
“Enhanced surveillance is not a fourth programme: it involves no new commitments or conditions. It is a framework to support the completion and delivery of ongoing reforms,” he said.
Under the new scheme, EU officials will visit Greece four times a year, instead of once as is the case in the current programme, to monitor implementation and “identify risks early, allowing for steps to be taken to address those risks at an early stage”.
Meeting in June, eurozone finance ministers sealed a deal to reduce Greece’s massive debt of 178% of its GDP. Most of the money lent to Greece came from the euro area partners, either through the ESM or its predecessor, the European Financial Stability Facility (EFSF).
Under the June deal, before the bailout programme ends Greece will receive the last tranche of loans worth €15 billion to increase its cash buffer and service its debt.
It remains unclear if Greece will try to tap international financial markets soon after exiting the bailout or allow some more time to rebuild investor confidence.