The Commission Commends Progress on Greece’s Medium-Term Plan Implementation

The European Commission has positively evaluated Greece’s progress in implementing its medium-term plan, as outlined in the recent spring package of the European Semester. This assessment covers the medium-term plans of 18 member states submitted last autumn.

Twelve member states, including Greece, Austria, Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, Latvia, Lithuania, Slovenia, and Sweden, have been deemed compliant with the recommended maximum increase in net expenditures, considering the flexibility provided under the national escape clause.

Portugal and Spain are generally compliant but show minor deviations from their recommended paths. In contrast, Cyprus, Ireland, Luxembourg, and the Netherlands are at risk of deviating from the Council’s prescribed maximum growth rates.

For member states under excessive deficit procedure (EDP), the Commission has determined that no additional actions are necessary for France, Italy, Hungary, Malta, Poland, and Slovakia at this time. Belgium’s newly submitted medium-term plan has prompted the Commission to propose a new corrective path, pending Council approval. Conversely, Romania’s rise in net expenditures exceeds its corrective path’s upper limit, leading the Commission to conclude that Romania has not implemented effective measures. Additionally, the initiation of an excessive deficit procedure for Austria is considered justified.

ASSESSMENT OF MACROECONOMIC IMBALANCES

The Commission’s review indicates that Greece, Hungary, Italy, the Netherlands, Slovakia, and Sweden continue to experience significant macroeconomic imbalances due to persistent vulnerabilities. Cyprus, however, does not face such imbalances as its external and private debt vulnerabilities are decreasing, supported by robust economic growth and declining public debt from ongoing fiscal surpluses.

Similarly, Germany is classified as not facing imbalances, with reduced vulnerabilities related to its large current account surplus and notable recent policy progress. Romania, on the other hand, continues to encounter excessive imbalances.