# EUR-Lex - 52011SC0808 - EN

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# 52011SC0808

**Recommendation for a COUNCIL RECOMMENDATION on the National Reform Programme 2011 of Greeceand delivering a Council opinionon the updated Stability Programme of Greece, 2011-2014 /* SEC/2011/0808 final */**

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Recommendation for a

COUNCIL RECOMMENDATION

on the National Reform Programme 2011 of Greece
and delivering a Council opinion
on the updated Stability Programme of Greece, 2011-2014

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 121(2) and 148(4)
thereof,

Having regard to Council Regulation (EC) No
1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary
positions and the surveillance and coordination of economic policies , and in
particular Article 5(3) thereof,

Having regard to the recommendation of the
European Commission,

Having regard to the conclusions of the
European Council,

Having regard to the opinion of the
Employment Committee,

After consulting the Economic and Financial
Committee,

Whereas:

(1) 
On 26 March 2010, the European Council agreed to
the European Commission's proposal to launch a new strategy for jobs and
growth, Europe 2020, based on enhanced coordination of economic policies, which
will focus on the key areas where action is needed to boost Europe’s potential
for sustainable growth and competitiveness.

(2) 
On 13 July 2010, the Council adopted a
recommendation on the broad guidelines for the economic policies of the Member States and the Union (2010 to 2014) and on 21 October 2010, adopted a decision on
Guidelines for the employment policies of the Member States,[1]
which together form the “integrated guidelines”. Member States were invited to
take the integrated guidelines into account in their national economic and
employment policies.

(3) 
On 12 January 2011, the Commission adopted the
first Annual Growth Survey, marking the start of a new cycle of economic
governance in the EU and the first European semester of ex-ante and integrated policy
coordination, which is anchored in the Europe 2020 strategy.

(4) 
On 25 March 2011, the European Council endorsed
the priorities for fiscal consolidation and structural reform (in line with the
Council’s conclusions of 15 February and 7 March 2011 and further to the
Commission’s Annual Growth Survey). It underscored the need to give priority to
restoring sound budgets and fiscal sustainability, reducing unemployment
through labour market reforms and making new efforts to enhance growth.

(5) 
On 3 May 2010, Greece presented an encompassing
adjustment programme supported by financial assistance provided by the
euro-area Member States and the IMF amounting to EUR 110 billion. The
accompanying Memorandum of Understanding and its successive supplements lay
down the economic policy conditions on the basis of which the financial
assistance is disbursed.

(6) 
The key elements of policy conditionality have
been enshrined in Council Decision 2010/320/EU and its subsequent amendements[2]
addressed to Greece with a view to reinforcing and deepening fiscal
surveillance and giving notice to Greece to take measures for the deficit
reduction judged necessary to remedy the situation of excessive deficit under
the provisions of Articles 136 and 126(9) of the Treaty.

(7) 
On 25 March 2011, the European Council also
invited the Member States participating in the Euro Plus Pact to present their
commitments in time to be included in their Stability or Convergence Programmes
and their National Reform Programmes. Greece has not yet submitted an updated
Stability Programme nor have specific Euro Plus Pact commitments and actions
for 2011 been explicitly communicated by Greece. These are expected to be
submitted to the European Council.

(8) 
Over the last decade, Greece’s growth
performance was based on unsustainable drivers: consumption and residential
investment booms were accompanied by high real wage increases and rapid credit
growth; low real interest rates associated with euro adoption and financial
market liberalisation fed the boom. The 2008-2009 global crisis exposed the
vulnerabilities, including: unsustainable fiscal policies, partly hidden by
unreliable statistics and temporarily high revenues; rigid labour and product
markets; loss of competitiveness and rising external debt. While not at the
origin, the banking sector was affected by the economic and confidence crisis.
The extent of the deterioration in the fiscal position was revealed late due to
grave deficiencies in Greece's accounting and statistical systems. This delayed
the implementation of corrective measures. As concerns about Greek fiscal
sustainability arose and global risk aversion heightened, market sentiment
vis-à-vis Greece worsened sharply in early 2010. In April 2010, Greece asked for international financial assistance as it was confronted with sizeable
financing needs and not able to access international capital markets.

(9) 
Greece committed to
implementing the economic and financial adjustment programme with the aim of correcting
fiscal and external imbalances and restoring confidence in the short term. In
the medium run, it should lay the foundations for a growth model that relies
more on investment and exports supporting growth and employment. The programme
foresees comprehensive action on three fronts: (i) a frontloaded fiscal
consolidation strategy, supported by structural fiscal measures and better
fiscal control; (ii) structural reforms in the labour and product markets to
address competitiveness and growth; and (iii) efforts to safeguard banking
system stability.

(10) 
The Commission has assessed the draft National
Reform Programme[3]. It has taken into
account not only its relevance for sustainable fiscal and socio-economic policy
in Greece but also its conformity with EU rules and guidance, given the need to
strengthen the overall economic governance of the European Union by providing
EU level input into future national decisions. In this context, the Commission
stresses the urgency of implementing the planned measures to comply with
Council Decision (2010/320),

HEREBY
RECOMMENDS that Greece should:

fully implement the measures as laid down
in the Council Decision 2010/320/EU as amended by Council Decision XXXX/XXX,
and further specified in the Memorandum of Understanding of XX/XX/XXXX and its
subsequent supplements[, in particular the last supplement of XX/XX/XXXX].

Done at Brussels,

For
the Council

The
President

[1]               Maintained for 2011 by Council Decision 2011/308/EU
of 19 May 2011.

[2]               Council Decision of 10 May 2010 (2010/320/EU), (OJ L
145, 11.6.2010, p. 6); Council Decision of 7 September 2010 (2010/486/EU), (OJ
L 241, 14.9.2010, p. 12); Council Decision of 20 December 2010 (2011/57/EU),
(OJ L 26, 29.1.2011, p. 15); Council Decision of 7 March 2011 (2011/257/EU),
(OJ L 110, 29.4.2011, p. 26).

[3]               SEC(2011) 717.