by Rallou Alexopoulou

 

The Greek economy grew at a steady pace in 2022, although it is expected to moderate this year and in 2024. Despite the relatively large fiscal support provided to households and businesses to deal with the energy crisis, the primary balance turned positive, recording in 2022 primary surplus of 0.1% of GDP, the European Commission emphasizes for Greece.

 

Given that from 2024 the escape clause is deactivated and member countries are asked to return to fiscal balance, the Commission today published recommendations for each state for this year and also in view of the preparation of the 2024 budgets. According to them, Greece is invited, among others, to proceed with ending the support measures to deal with the energy crisis only if deemed necessary, ensuring a prudent fiscal policy, further improving the reforms through the Recovery Plan with an emphasis on taxation, speedy completion of REPowerEU and reducing the country's dependence on fossil fuels.

 

More specifically, based on the guidelines of the European Commission, Greece should take action this year and in 2024 to:

 

-Ending the energy support measures in force by the end of 2023, using the related savings to reduce the budget deficit. In the event of rising energy prices requiring support measures, these should be targeted at vulnerable households and businesses. At the same time, they should maintain incentives to save energy.

 

-Ensuring a prudent fiscal policy, in particular limiting primary expenditure in 2024 to no more than 2.6%. Maintaining nationally funded public investments and ensuring the effective absorption of the Recovery Fund grants and other European funds, especially to promote the green and digital transition. For the post-2024 period, Greece should continue to pursue a medium-term fiscal strategy of gradual and sustainable consolidation, combined with investment and reforms conducive to higher sustainable growth, to achieve prudent medium-term fiscal.

 

-Enhancing the reforms carried out as part of the Recovery and Resilience Plan, such as an investment-friendly tax system with the introduction of advance tax, broadening the tax base, including by revising the current tax structure for the self-employed and strengthening tax compliance with expanding the use of electronic payments.

 

Also, it is recommended to maintain and increase the autonomy of the tax administration by expanding its mandate to develop and manage its information systems and human resources. As for the public administration, it is recommended to ensure its effectiveness by ensuring that it can attract the right skills and maintaining consistency with the single pay scale. Non-performing loans should continue to decline as the secondary market for non-performing loans continues to improve.

 

Greece is recommended to maintain momentum in the sustained implementation of recovery and resilience, through the design and rapid completion of REPowerEU with a view to its rapid implementation. Ensuring continued adequate administrative capacity given the size of the project. Continue the rapid implementation of policy coherence programs, in close complementarity and synergy with the Recovery Plans.

 

To ensure adequate and equal access to health care, Greece is called upon to complete the development of the primary health care framework and to adopt stronger incentives to register a sufficient number of family doctors in order to achieve full population coverage and population registration. To complete the reform of the land registry with the completion of the land registry and the establishment and operation of the Hellenic Land Registry Organization.