The European Commission, which supervises the budgets of the 27 EU member countries, said it will end its “enhanced surveillance” program over Greece on 20 August.
The watchdog announced on Wednesday (Greek time) that “Greece has delivered on the bulk of the policy commitments” made to its partners in the 19-country euro area.
The move marks a formal end to a major crisis that threatened to see Greece ejected from the euro single currency group, imposed severe hardship on its citizens and roiled global financial markets.
“As a result of Greece’s efforts, the resilience of the Greek economy has substantially improved and the risks of spill-over effects on the Euro area economy have diminished significantly.”
“Maintaining Greece under enhanced surveillance is no longer justified,” it said.
The Greek financial crisis was a major test for the EU and provided proof, if any were needed, that bailing out a bigger economy, like debt-ridden Italy, would probably exceed the means that even a united Europe can muster, Kathimerini reported.
“With this development, along with the premature repayment of the International Monetary Fund loans and the lifting of capital restrictions, a difficult chapter for our nation ends after 12 years,” Greek Finance Minister Christos Staikouras said in response to a Commission letter confirming the enhanced surveillance would end.
“Greece is returning to European normality and stops being an exception in the eurozone,” Staikouras said. “This achievement is the fruit and the recognition of the great sacrifices of Greek society, of the government’s fiscal policies but also of its broader reforms,” he added.
Staikouras said that ending the enhanced surveillance the economy was under reinforces Greece’s position in international markets, boosts the country’s development and ability to attract investments and grants greater freedom in the management of fiscal policy, within the regulations applying to all EU members.
“Until today, despite unprecedented, multi-level crises and the new — Europe-wide and international — challenges, we have proven, both citizens and the state, that we can do it,” Staikouras said. “We set targets and with a plan, unity, determination, trust in our abilities and hard work, we achieve them.”
Although Greece has returned to international bond markets, its credit rating remains below investment grade, which raises its borrowing costs and precludes many potential investors from buying Greek bonds. The government in Athens says it hopes to regain investment grade by next year.