End of the debt crisis in Greece
12.7.2018
Question for written answer E-003853-18
to the Commission
Rule 130
Pirkko Ruohonen-Lerner (ECR)
In June, Greece was granted its last disbursement, after which Commissioner Moscovici, among others, stated that the crisis in Greece has come to an end[1]. On the positive side, both the economy and investments experienced growth last year, and there was a significant budget surplus before debt interests were paid.
However, significant problems remain. The unemployment level is around 20%, and the percentage of employed young people is twice as high. Exports were more modest than imports last year, leaving the country’s current account negative.
In other words, the revenue from exports is not enough to finance imports, and the difference needs to be covered with, for example, further debt. Investments are based on projects funded by the EFSI and other Union funding plans[2]. There have been problems with the realisation of the investments[3].
The non-performing loans offered by the most important banks in Greece are the largest within the banking union. Both the Commission and the International Monetary Fund still find the level of debt in Greece unsustainable[4]. Even though the economy did grow, this did not lead to a growth in tax revenue in Greece last year. However, tax revenue is necessary for managing the debt.
1. Why does the Commission consider the debt crisis to have ended, even though Greece’s chances of receiving loans from the private market have still not normalised?
2. What motivators will Greece have to reduce its debt after the last loans and buffers have been paid via the loan programme in 2022?
3. Why is the recently-approved agreement on the large buffers for reducing debt and securing payments, as well as debt reliefs, not being called Greece’s fourth bailout package?