Recommendation for a COUNCIL RECOMMENDATION on the 2022 National Reform Programme of Greece and delivering a Council opinion on the 2022 Stability Programme of Greece
Date: 2022-05-23
Institutions: European Commission, Secretariat-General
Subjects: Greece, economic policy, economic recovery, economic reform, energy policy, fiscal policy, investment, organisation of health care, stability pact, stability programme

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   EUROPEAN COMMISSION  Brussels, 23.5.2022  COM(2022) 609 final  Recommendation for a COUNCIL RECOMMENDATION on the 2022 National Reform Programme of Greece and delivering a Council opinion on the 2022 Stability Programme of Greece {SWD(2022) 609 final} - {SWD(2022) 640 final}  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the 2022 National Reform Programme of Greece and delivering a Council opinion on 
the 2022 Stability Programme of Greece 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles 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 
policies1, and in particular Article 5(2) thereof, 

Having  regard  to  Regulation  (EU)  No  1176/2011  of  the  European  Parliament  and  of  the 
Council  of  16  November  2011  on  the  prevention  and  correction  of  macroeconomic 
imbalances2, and in particular Article 6(1) thereof, 

Having regard to the recommendation of the European Commission, 

Having regard to the resolutions of the European Parliament, 

Having regard to the conclusions of the European Council, 

Having regard to the opinion of the Employment Committee, 

Having regard to the opinion of the Economic and Financial Committee, 

Having regard to the opinion of the Social Protection Committee, 

Having regard to the opinion of the Economic Policy Committee, 

Whereas: 

(1) 

Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council3,  which 
established  the  Recovery  and  Resilience  Facility,  entered  into  force  on  19  February 
2021.  The  Recovery  and  Resilience  Facility  provides  financial  support  for  the 
implementation of reforms and investment, entailing a fiscal impulse financed by the 
Union.  It  contributes  to  the  economic  recovery  and  to  the  implementation  of 
sustainable and growth-enhancing reforms and investment, in particular to promote the 
green and digital transition, while strengthening the resilience and potential growth of 
the Member States’ economies. It also helps strengthen sustainable public finances and 
boost growth and job creation in the medium and long term. The maximum financial 
contribution  per  Member  State  under  the  Recovery  and  Resilience  Facility  [was] 
updated on [XX] June 2022, in line with Article 11(2) of Regulation (EU) 2021/241.  

(2) 

On  24  November  2021,  the  Commission  adopted  the  Annual  Sustainable  Growth 
Survey,  marking  the  start  of  the  2022  European  Semester  for  economic  policy 

1 
2 
3 

OJ L 209, 2.8.1997, p. 1. 
OJ L 306, 23.11.2011, p. 25. 
Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council  of  12  February  2021 
establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, p. 17). 

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coordination.  It  took  due  account  of  the  reaffirmed  joint  commitment  of  the  Porto 
Social Summit of May 2021 to further implement the European Pillar of Social Rights, 
proclaimed  by  the  European  Parliament,  the  Council  and  the  Commission  on  17 
November  2017.  The  European  Council  endorsed  the  priorities  of  the  2022  Annual 
Sustainable Growth Survey on 25 March 2022. On 24 November 2021, on the basis of 
Regulation  (EU)  No  1176/2011,  the  Commission  also  adopted  the  Alert  Mechanism 
Report,  in  which  it  identified  Greece  as  one  of  the  Member  States  for  which  an  in-
depth  review4  would  be  needed.  On  the  same  date,  the  Commission  also  adopted  a 
recommendation  for  a  Council  recommendation  on  the  economic  policy  of  the  euro 
area, which was adopted on 5 April 2022 by the Council, as well as the proposal for 
the 2022 Joint Employment Report analysing the implementation of the Employment 
Guidelines  and  the  principles  of  the  European  Pillar  of  Social  Rights,  which  was 
adopted by the Council on 14 March 2022.  

Russia’s  invasion  of  Ukraine,  in  the  wake  of  the  global  pandemic,  has  significantly 
altered the geopolitical and economic context. The impact of the invasion on Member 
States’ economies has been felt for example through higher energy and food prices and 
weaker  growth  prospects.  The  higher  energy  prices  weigh  particularly  on  the  most 
vulnerable households experiencing or at risk of energy poverty. The EU is also seeing 
an unprecedented inflow of people fleeing Ukraine. In this context, on 4 March 2022, 
the  Temporary  Protection  Directive  was  triggered5  for  the  first  time,  granting 
displaced persons from Ukraine the right to legally stay in the EU, as well as access to 
education and training, labour market, healthcare, housing and social welfare. 

Taking  account  of  the  rapidly  changing  economic  and  geopolitical  situation,  the 
European Semester resumes its broad economic and employment policy coordination 
in 2022, while evolving in line with the implementation requirements of the Recovery 
and  Resilience  Facility,  as  outlined  in  the  2022  Annual  Sustainable  Growth  Survey. 
The  implementation  of  the  adopted  recovery  and  resilience  plans  is  essential  for  the 
delivery of the policy priorities under the European Semester, as the plans address all 
or a significant subset of the relevant country-specific recommendations issued in the 
2019  and  2020  Semester  cycles.  The  2019  and  2020  country-specific 
recommendations  remain  equally  relevant  also  for  recovery  and  resilience  plans 
revised, updated or amended in accordance with Articles 14, 18 and 21 of Regulation 
(EU) 2021/241, in addition to any country-specific recommendations issued up to the 
date of submission of the modified plan.  
The General Escape Clause has been active since March 20206. In its Communication 
of  3  March  20217,  the  Commission  set  out  its  view  that  the  decision  on  the 
deactivation or continued application of the general escape clause should be taken as 
an overall assessment of the state of the economy, with the level of economic activity 
in the EU or euro area compared to pre-crisis levels (end-2019) as a key quantitative 
criterion. Heightened uncertainty and strong downside risks to  the economic outlook 

Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 
on the prevention and correction of macroeconomic imbalances, OJ L 306, 23.11.2011, p. 25. 
Council Implementing Decision (EU) 2022/382 of 4 March 2022 establishing the existence of a mass 
influx of displaced persons from Ukraine within the meaning of Article 5 of Directive 2001/55/EC, and 
having the effect of introducing temporary protection, OJ L 71, 4.3.2022, p. 1. 
Communication from the Commission to the Council on the activation of the general escape clause of 
the Stability and Growth Pact, Brussels, 20.3.2020, COM(2020) 123 final. 
Communication  from  the  Commission  to  the  Council  on  one  year  since  the  outbreak  of  COVID-19: 
fiscal policy response, Brussels, 3.3.2021, COM(2021) 105 final. 

(3) 

(4) 

(5) 

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(6) 

(7) 

in  the  context  of  war  in  Europe,  unprecedented  energy  price  hikes  and  continued 
supply  chain  disturbances  warrant  the  extension  of  the  general  escape  clause  of  the 
Stability and Growth Pact through 2023.  

Following the approach in the Council opinion of 18 June 2021 on the 2021 Stability 
Programme,  the  fiscal  stance  is  currently  best  measured  as  the  change  in  primary 
expenditure  (net  of  discretionary  revenue  measures),  excluding  COVID-19  crisis-
related  temporary  emergency  measures  but  including  expenditure  financed  by  non-
repayable  support  (grants)  from  the  Recovery  and  Resilience  Facility  and  other  EU 
funds,  relative  to  medium-term  potential  growth8.  Going  beyond  the  overall  fiscal 
stance, in order to assess whether national fiscal policy is prudent and its composition 
is conducive to a sustainable recovery consistent with the green and digital transitions, 
attention  is  also  paid  to  the  evolution  of  nationally-financed9  primary  current 
expenditure  (net  of  discretionary  revenue  measures  and  excluding  COVID-19  crisis-
related temporary emergency measures) and investment. 

On  2  March  2022,  the  Commission  adopted  a  Communication  providing  broad 
guidance  for  fiscal  policy  in  2023,  aiming  at  supporting  the  preparation  of  Member 
States’  Stability  and  Convergence  Programmes  and  thereby  strengthening  policy 
coordination10. The Commission noted that, based on the macroeconomic outlook of 
the  2022  winter  forecast,  transitioning  from  an  aggregate  supportive  fiscal  stance  in 
2020-2022  to  a  broadly  neutral  aggregate  fiscal  stance  would  appear  appropriate  in 
2023,  while  standing  ready  to  react  to  the  evolving  economic  situation.  The 
Commission announced that the fiscal recommendations for 2023 should continue to 
differentiate  across  Member  States  and  take  into  account  possible  cross-country 
spillovers. The Commission invited the Member States to reflect the guidance in their 
Stability  and  Convergence  Programmes.  The  Commission  committed  to  closely 
monitor  the  economic  developments  and  adjust  its  policy  guidance  as  needed  and  at 
the latest in its Semester spring package of late May 2022. 

(8)  With  respect  to  the  fiscal  guidance  provided  on  2  March  2022,  the  fiscal 
recommendations  for  2023  take  into  account  the  worsened  economic  outlook,  the 
heightened uncertainty and further downside risks, and the higher inflation compared 
to the winter forecast. Against these considerations, the fiscal response has to expand 
public investment for the green and digital transition and energy security, and sustain 
the purchasing power of the most vulnerable households so as to cushion the impact of 
the energy price hike and help limit inflationary pressures from second round effects 
via targeted and temporary measures; fiscal policy has to remain agile so as to adjust 
to the rapidly evolving circumstances, and be differentiated across countries depending 
on their fiscal and economic situation, including as regards the exposure to the crisis 
and the inflow of displaced persons from Ukraine. 

(9) 

On  27  April  2021,  Greece  submitted  its  national  recovery  and  resilience  plan  to  the 
Commission, in accordance with Article 18(1) of Regulation (EU) 2021/241. Pursuant 
to  Article  19  of  Regulation  (EU)  2021/241,  the  Commission  assessed  the  relevance, 

8 

9 
10 

The  estimates  on  the  fiscal  stance  and  its  components  in  this  recommendation  are  Commission 
estimates  based  on  the  assumptions  underlying  the  Commission  2022  spring  forecast.  The 
Commission’s estimates of medium-term potential growth do not include the positive impact of reforms 
that are part of the Recovery and Resilience Plan and that can boost potential growth.  
Not financed by grants from the Recovery and Resilience Facility and other EU funds. 
Communication  from  the  Commission  to  the  Council:  Fiscal  policy  guidance  for  2023,  Brussels, 
2.3.2022, COM(2022) 85 final. 

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effectiveness,  efficiency  and  coherence  of  the  recovery  and  resilience  plan,  in 
accordance with the assessment guidelines of Annex V to that Regulation. On 6 July 
2021,  the  Council  adopted  its  Decision  on  the  approval  of  the  assessment  of  the 
recovery and resilience plan for Greece11. The release of instalments is conditional on 
a decision by the Commission,  taken in  accordance with  Article 24(5)  of  Regulation 
(EU)  2021/241,  that  Greece  has  satisfactorily  fulfilled  the  relevant  milestones  and 
targets  set  out  in  the  Council  Implementing  Decision.  Satisfactory  fulfilment 
presupposes  that  the  achievement  of  preceding  milestones  and  targets  has  not  been 
reversed. 

(10)  On 30 April 2022, Greece submitted its 2022 National Reform Programme and, on 29 
April 2022, its 2022 Stability Programme, in line with Article 4 of Regulation (EC) No 
1466/97.  To  take  account  of  their  interlinkages,  the  two  programmes  have  been 
assessed  together.  In  accordance  with  Article  27  of  Regulation  (EU)  2021/241,  the 
2022  National  Reform  Programme  also  reflects  Greece’s  bi-annual  reporting  on  the 
progress made in achieving its recovery and resilience plan.  

in 

the 

relevant 

addressing 

(11)  The Commission published the 2022 country report for Greece12 on 23 May 2022. It 
assessed  Greece’s  progress 
country-specific 
recommendations adopted by the Council in 2019, 2020 and 2021, and  took stock of 
Greece’s implementation of the recovery and resilience plan, building on the Recovery 
and Resilience Scoreboard. Based on this analysis, the country report identified gaps 
with respect to those challenges that are not addressed or only partially addressed by 
the  recovery  and  resilience  plan,  as  well  as  new  and  emerging  challenges,  including 
those emerging from Russia’s invasion of Ukraine. It also assessed Greece’s progress 
on  implementing  the  European  Pillar  of  Social  Rights  and  on  achieving  the  EU 
headline  targets  on  employment,  skills  and  poverty  reduction,  as  well  as  progress  in 
achieving the UN’s Sustainable Development Goals.  

(12)  The  Commission  carried  out  an  in-depth  review  under  Article  5  of  Regulation  (EU) 
No  1176/2011  for  Greece  and  published  its  results  on  23  May  202213.  The 
Commission  concluded  that  Greece  is  experiencing  macroeconomic  imbalances. 
Vulnerabilities  relate  to  high  government  debt,  incomplete  external  rebalancing  and 
high  non-performing  loans  in  a  context  of  low  potential  growth  and  high 
unemployment. 

(13)  On  23  May  2022,  the  Commission  issued  a  report  under  Article  126(3)  TFEU.  This 
report discussed the budgetary situation of Greece, as its general government deficit in 
2021 exceeded the 3% of GDP Treaty reference value. The report concluded that the 
deficit  criterion  was  not  fulfilled.  In  line  with  the  Communication  of  2  March  2022, 
the  Commission  did  not  propose  to  open  new  excessive  deficit  procedures  in  spring 
2022  and  it  will  reassess  the  relevance  of  proposing  to  open  excessive  deficit 
procedures in autumn 2022. 

(14)  On  20  July  2020,  the  Council  recommended  Greece  to  take  in  2020  and  2021  all 
necessary measures, in line with the general escape clause, to  effectively address the 
pandemic,  sustain 
It  also 
recommended  Greece  to  pursue,  when  economic  conditions  allow,  fiscal  policies 

the economy  and  support 

the  ensuing  recovery. 

11 

12 
13 

Council Implementing Decision of 6 July 2021 on the approval of the assessment of the recovery and 
resilience plan for Greece (ST 10152/2021). 
SWD(2022) 609 final. 
SWD(2022) 630 final. 

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aimed  at  achieving  prudent  medium-term  fiscal  positions  and  ensuring  debt 
sustainability,  while  enhancing  investment.  In  2021,  based  on  data  validated  by 
Eurostat,  Greece’s  general  government  deficit  fell  from  10.2%  of  GDP  in  2020  to 
7.4% in 2021. The fiscal policy response by Greece supported the economic recovery 
in 2021, while temporary emergency support measures declined from 7.6% of GDP in 
2020 to 7.2% in 2021. The measures taken by Greece in 2021 have been in line with 
the Council Recommendation of 20 July 2020. The discretionary budgetary measures 
adopted by the government in 2020 and 2021 were temporary or matched by offsetting 
measures.  Based  on  data  validated  by  Eurostat,  general  government  debt  stood  at 
193.3% of GDP in 2021. 

(15)  The  macroeconomic  scenario  underpinning  the  budgetary  projections  in  the  2022 
Stability Programme is realistic for 2022 and favourable for 2023. The 2022 Stability 
Programme  projects  real  GDP  to  grow  by  3.1%  in  2022  and  4.8%  in  2023.  By 
comparison, the Commission’s 2022 spring forecast projects higher real GDP growth 
of 3.5% in 2022 and lower real GDP growth of 3.1% in 2023. The difference between 
the forecasts is mainly driven by the different assumptions on the pace of absorption of 
EU  funds  as  well  as  on  the  impact  of  the  military  aggression,  notably  on  private 
consumption.  In  its  2022  Stability  Programme,  the  Government  expects  that  the 
headline  deficit  will  decrease  to  4.4%  of  GDP  in  2022  and  to  1.4  %  in  2023.  The 
decrease  in  2022  mainly  reflects  the  ongoing  recovery  in  economic  activity  and  the 
unwinding  of  most  emergency  measures.  According  to  the  Programme,  the  general 
government debt-to-GDP ratio is expected to decrease strongly to 180.2% in 2022, and 
to decline to 168.6% in 2023. Based on policy measures known at the cut-off date of 
the  forecast,  the  Commission  2022  spring  forecast  projects  a  government  deficit  for 
2022 and 2023 of 4.3% of GDP and 1.0% respectively. This is broadly in line with the 
deficit  projected  in  the  2022  Stability  Programme.  Notwithstanding  the  difference  in 
real GDP growth, the Commission 2022 spring forecast assumes more dynamic price 
and  wage  growth  for  both  2022  and  2023,  thereby  projecting  higher  revenues  from 
personal  income.  The  Commission  2022  spring  forecast  projects  a  higher  general 
government  debt-to-GDP  ratio,  of  185.7%  in  2022  and  180.4%  in  2023.  The 
difference is due to different estimation of differences between cash and accrual fiscal 
balances as well as different assumption on net accumulation of financial assets.  

(16) 

Based on the Commission spring 2022 forecast, the current  estimate of the  medium-
term (10-year-average) potential output growth is -0.3%. However, this estimate does 
not include the impact of the reforms that are part of the Recovery and Resilience Plan 
and can boost Greece’s potential growth. 

In 2022, the government phased out the majority of measures taken in response to the 
COVID-19 crisis, such that the temporary emergency support measures are projected 
to  decline  from  7.2%  of  GDP  in  2021  to  1.8%  in  2022.  The  government  deficit  is 
impacted  by  the  measures  adopted  to  counter  the  economic  and  social  impact  of  the 
increase in energy prices, which in the Commission 2022 spring forecast are estimated 
at 1.1% of GDP in 2022 and no fiscal impact in 2023 as they are planned to be phased 
out.14  This  impact  on  the  deficit  is  partially  offset  by  higher  revenues  from  the 
emission  allowances.  These  measures  mainly  consist  of  subsidies  to  energy  users, 
social transfers to  poorer households and cuts  to  indirect  taxes on transport services. 
These  measures  have  initially  been  announced  as  temporary.  Following  the 

14 

The figures represent the level of annual budgetary costs of those  measures taken since autumn 2021, 
including current revenue and expenditure as well as – where relevant – capital expenditure measures. 

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submission of Greece’s Stability Programme and the cut-off date of the Commission 
2022 spring forecast, the government announced a new package of measures for 2022, 
which  aim  to  address  the  consequences  of  increased  energy  prices.  In  case  energy 
prices remain elevated also in 2023, some of these measures could be continued. The 
government  deficit  is  also  impacted  by  the  costs  to  offer  temporary  protection  to 
displaced  persons  from  Ukraine,  which  in  the  Commission  2022  spring  forecast  are 
projected at 0.1% of GDP in 2022 and 0.1% in 2023.15  

(17)  On  18  June  2021,  the  Council  recommended  that  in  2022  Greece16  should  use  the 
Recovery  and  Resilience  Facility  to  finance  additional  investment  in  support  of  the 
recovery  while  pursuing  a  prudent  fiscal  policy.  Moreover,  it  should  preserve 
nationally  financed  investment.  It  also  recommended  Greece  to  pursue,  when 
economic  conditions  allow,  a  fiscal  policy  aimed  at  achieving  prudent  medium-term 
fiscal positions and ensuring fiscal sustainability in the medium term, and at the same 
time, to enhance investment to boost growth potential. 

(18) 

In  2022,  based  on  the  Commission’s  2022  spring  forecast  and  including  the 
information  incorporated  in  Greece’s  2022  Stability  Programme,  the  fiscal  stance  is 
projected  to  be  supportive  at  –3.3%  of  GDP.17  Greece  plans  to  provide  continued 
support  to  the  recovery  by  making  use  of  the  Recovery  and  Resilience  Facility  to 
finance  additional  investment  as  recommended  by  the  Council.  The  positive 
contribution to economic activity of expenditure financed by Recovery and Resilience 
Facility grants and other EU funds is projected to increase by 0.2 percentage points of 
GDP  compared  to  2021.  Nationally  financed  investment  is  projected  to  provide  an 
expansionary  contribution  to  the  fiscal  stance  of  0.8  percentage  points  in  2022.18 
Therefore, Greece plans preserve nationally financed investment, as recommended by 
the  Council.  At  the  same  time,  the  growth  in  nationally-financed  primary  current 
expenditure  (net  of  new  revenue  measures)  in  2022  is  projected  to  provide  an 
expansionary  contribution  of  2.2  percentage  points  to  the  overall  fiscal  stance.  This 
significant expansionary contribution includes the additional impact of the measures to 
address  the  economic  and  social  impact  of  the  increase  in  energy  prices  (0.6  %  of 
GDP)  as  well  as  the  costs  to  offer  temporary  protection  to  displaced  persons  from 
Ukraine  (0.1%  of  GDP),  while  the  increased  expenditure  for  pensions  and  social 
benefits  is  also  projected  to  contribute  (0.6  %  of  GDP)  to  the  growth  in  net  current 
expenditure.  Based  on  the  Commission’s  forecast,  these  measures  are  not  fully 
matched by offsetting measures. 

15 

16 

17 

18 

The total number of displaced persons from Ukraine to the EU is assumed to gradually reach 6 million 
by  the  end  of  2022,  and  their  geographical  distribution  is  estimated  based  on  the  size  of  the  existing 
diaspora, the relative population of the receiving Member State, and the actual distribution of displaced 
persons from Ukraine across the EU as of March 2022. For budgetary costs per person, estimates are 
based on the Euromod microsimulation model of the Commission’s Joint Research Centre, taking into 
account both cash transfers people may be eligible for as well as in-kind benefits such as education and 
healthcare. 
Council  Recommendation  of  18  June  2021  delivering  a  Council  opinion  on  the  2021  Stability 
Programme of Greece, OJ C 304, 29.7.2021, p.33. 
A negative (positive) sign of the indicator corresponds to an excess (shortfall) of primary expenditure 
growth  compared  with  medium-term  economic  growth,  indicating  an  expansionary  (contractionary) 
fiscal policy. 
Other  nationally-financed  capital  expenditure  is  projected  to  provide  an  expansionary  contribution  of 
0.1 percentage point of GDP. 

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(19) 

(20) 

In  2023,  the  fiscal  stance  is  projected  in  the  Commission  2022  spring  forecast  at 
+1.5%  of  GDP  on  a  no-policy  change  assumption.19  Greece  is  projected  to  continue 
using  the  grants  from  the  Recovery  and  Resilience  Facility  in  2023  to  finance 
additional  investment  in  support  of  the  recovery.  The  positive  contribution  to 
economic activity of expenditure financed by Recovery and Resilience Facility grants 
and  other  EU  funds  is  projected  to  decrease  by  0.3  percentage  points  of  GDP 
compared  to  2022,  reflecting  the  starting  phase  of  the  new  programming  period  for 
other  EU  funds.  Nationally-financed 
to  provide  an 
expansionary  contribution  to  the  fiscal  stance  of  0.6  percentage  points  in  2023.20  At 
the same time, growth in nationally-financed primary current expenditure (net of new 
revenue measures) in 2023 is projected to provide a contractionary contribution of 1.7 
percentage  points  to  the  overall  fiscal  stance.  This  includes  the  impact  from  the 
phasing out of the measures addressing the increased energy prices of 1.1% of GDP.  

is  projected 

investment 

In  the  2022  Stability  Programme,  the  general  government  deficit  is  expected  to 
gradually decline to 0.4% of GDP in 2024 and to 0.1% by 2025. Therefore, the general 
government  deficit  is  planned  to  remain  below  3%  of  GDP  over  the  Programme 
horizon. These projections assume that the economic recovery will continue and factor 
in the prolongation of growth-friendly reductions in the solidarity surcharge applied on 
top of the personal income tax, and in the social solidarity contributions. According to 
the  Programme,  the  general  government  debt-to-GDP  ratio  is  expected  to  decrease 
further,  specifically  with  a  decrease  to  155.2%  in  2024,  and  a  decline  to  146.5%  in 
2025. Based on the Commission’s analysis, debt sustainability risks appear high over 
the medium term.  

(21)  Building  on  reforms  undertaken  as  part  of  the  recovery  and  resilience  plan, 
modifications  in  Greece’s  tax  policy  framework  could  help  address  the  investment 
gap.  More  specifically,  the  introduction  of  an  advance  tax  ruling  system  could 
strengthen  legal  certainty  for  investors  and  reinforce  ongoing  efforts  to  simplify  the 
tax system. Further, building on best practice from other Member States, a review of 
the existing annual lump-sum tax on the self-employed (on top of personal income tax 
and  value  added  tax)  could  improve  the  structure  of  the  tax  burden  on  the  self-
employed,  encourage  voluntary  tax  compliance,  and  support  investments.  Greece  is 
continuing  to  take  steps  to  modernise  its  public  administration,  but  its  overall 
performance  remains  low,  which  is  partially  due  to  the  challenge  of  attracting  and 
maintaining  high-calibre  staff.  The  recovery  and  resilience  plan  contains  measures 
aiming  to  improve  the  effectiveness  of  the  public  administration  with  a  particular 
focus on improving its digital services. Beyond the measures that are part of its plan, 
Greece is progressing in setting up an integrated human resources management system 
with digital organisational charts for public sector entities and job descriptions for all 
posts now in place. This is expected to facilitate the allocation of resources according 
to identified and prioritised needs. At the same time, while the number of permanent 
officials  has  been  kept  broadly  stable  thanks  to  the  one-in-one-out  hiring  rule  that 
remains  in  place,  there  has  been  a  steep  increase  in  temporary  staff  by  nearly  25% 
since  2018.  The  increase  in  the  size  of  the  public  administration  could  reverse  the 

19 

20 

A negative (positive) sign of the indicator corresponds to an excess (shortfall) of primary expenditure 
growth  compared  with  medium-term  economic  growth,  indicating  an  expansionary  (contractionary) 
fiscal policy. 
Other  nationally-financed  capital  expenditure  is  projected  to  provide  a  neutral  contribution  of  0.0 
percentage point of GDP. 

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(22) 

efforts made to move Greece’s wage bill (compared to GDP) towards the EU average. 
Beyond  the  fiscal  risk,  given  that  the  selection  process  for  temporary  posts  is  not  as 
thorough as for permanent posts, this could weaken the integrity of the new selection 
process put in place for permanent civil servants. The continuation of the one-in-one-
out hiring rule for permanent staff, which has been complemented by setting a ceiling 
for  temporary  staff  that  is  being  applied  as  of  2022,  sets  an  overall  framework  for 
strengthening  central  control  of  hirings  and  enabling  staffing  numbers  to  move 
towards  pre-pandemic  levels.  If  the  expected  reduction  in  overall  staffing  levels  is 
realised, this could allow for remuneration levels to be adjusted for specific posts and 
entities  deemed  critical  and  where  the  public  administration  is  facing  difficulties  in 
attracting and maintaining qualified staff. This could entail linking the job description 
to  a  supplementary  wage  grid  or  establishing  a  special  wage  grid  for  specific  public 
sector entities (e.g. market regulators), as such systematic approaches would not risk 
undermining  the  unified  wage  grid  and  are  consistent  with  prudent  fiscal  policy. 
Finally,  while  the  recovery  and  resilience  plan  does  include  measures  to  strengthen 
active  labour  market  policies,  there  remains  scope  for  further  action  to  increase  the 
employability of young people and women, to support an inclusive labour market built 
on more and better jobs. 

in  addition 

in  2019  and  2020, 

In accordance with Article 19(3), point (b), and Annex V, criterion 2.2, to Regulation 
(EU) 2021/241, the recovery and resilience plan includes an extensive set of mutually 
reinforcing reforms and investments  to be implemented by 2026. These  help address 
all  or  a  significant  subset  of  the  economic  and  social  challenges  outlined  in  the 
country-specific  recommendations  addressed  to  Greece  by  the  Council  in  the 
European  Semester 
to  any  country-specific 
recommendations  issued  up  to  the  date  of  adoption  of  a  plan.  In  particular,  these 
recommendations  address 
the  quality  and  sustainability  of  public  finances; 
accessibility and resilience of the health system; active labour market policies; policies 
supporting  public  investment  in  education,  skills  and  employability;  research  and 
development;  safe,  smart,  sustainable  and  resilient  transport  and  logistics;  clean  and 
efficient  production  and  use  of  energy, 
renewable  energy  and 
interconnection projects; environmental infrastructure; renewal of urban areas; and the 
digital  transformation  of  the  public  administration  and  businesses.  The  plan  also 
includes a significant number of measures addressing challenges in the areas of fiscal 
structural policies, social welfare, financial stability, labour and product markets, and 
the  modernisation  of  public  administration,  all  of  which  follows  up,  broadens  and 
complements  post-programme  commitments.  The  plan  also  contains  measures  to 
improve  competitiveness  and  promote  private  investment  by  improving  the  business 
the  regulatory  framework.  These  reforms  are 
environment  and  simplifying 
complemented  by  a  loan  facility  that  is  intended  to  incentivise  private  investment  in 
transformative  sectors  of  the  economy,  including  the  green  transition  and  digital 
transformation.  

including 

(23)  The  implementation  of  the  recovery  and  resilience  plan  of  Greece  is  expected  to 
contribute  to  making  further  progress  on  the  green  and  digital  transition.  Measures 
supporting  the  climate  objectives  in  Greece  account  for  37.5%  of  the  plan’s  total 
allocation,  while  measures  supporting  digital  objectives  account  for  23.3%  of  the 
plan’s total allocation. The fully-fledged implementation of the recovery and resilience 
plan, in line with the relevant milestones and targets, will help Greece swiftly recover 
from  the  fallout  of  the  COVID-19  crisis,  while  strengthening  its  resilience.  The 
systematic  involvement  of  social  partners  and  other  relevant  stakeholders  remains 
important  for  the  successful  implementation  of  the  recovery  and  resilience  plan,  as 

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well  as  other  economic  and  employment  policies  going  beyond  the  plan,  to  ensure 
broad ownership of the overall policy agenda. 

(24)  The  Greek  recovery  and  resilience  plan  sets  out  a  comprehensive  management 
framework for coordinating, implementing and monitoring the investment and reform 
measures. However, the actual implementation of the plan will crucially hinge on the 
administrative and implementation capacity of the implementing bodies and will need 
to  be  closely  monitored.  The  technical  services  of  the  regional  and  local 
administration,  including  municipal  companies,  are  expected  to  contribute  to  the 
implementation  of  a  number  of  components,  and  their  administrative  capacity,  in 
particular for the smaller municipalities, is usually  limited and it would be important 
for  additional  support  from  the  central  level  to  be  made  available  when  needed. 
Respecting  strict  time  schedules,  reacting  quickly  to  blockages  and  finding  solutions 
will  be  critical  for  the  smooth  implementation  of  the  plan.  A  high-level  inter-
ministerial  working  group  to  address  bottlenecks  may  be  useful.  Finally,  in  terms  of 
overall  coordination,  the  Recovery  and  Resilience  Facility  (RRF)  Agency,  which  is 
part  of  the  Ministry  of  Finance,  will  have  a  key  role  and  sufficient  resources  are 
expected to be assigned to it, while the close collaboration of the RRF Agency and the 
General Secretariat for Coordination (which is responsible for coordinating the reform 
measures) is essential. 

(25)  The Commission approved the Partnership Agreement21 of Greece on 29 July 2021. In 
October and November 2021 Greece submitted its 21 cohesion policy programmes to 
the European Commission.  In line with  Regulation (EU) 2021/1060  of the European 
Parliament  and  of  the  Council  of  24  June  2021,  Greece  has  taken  into  account  the 
relevant  country-specific  recommendations  in  the  programming  of  the  2021-2027 
cohesion  policy  funds.  This  is  a  prerequisite  for  improving  the  effectiveness  and 
maximising  the  added  value  of  the  financial  support  to  be  received  from  cohesion 
policy  funds,  while  promoting  the  coordination,  complementarity  and  coherence 
between  these  funds  and  other  Union  instruments  and  funds.  The  successful 
implementation  of  the  Recovery  and  Resilience  Facility  and  cohesion  policy 
programmes also depends on the removal of bottlenecks to investment to support the 
green and digital transition and balanced territorial development.  

(26)  Following its  successful  completion of the financial assistance programme under the 
European  Stability  Mechanism  in  2018,  Greece  has  been  subject  to  enhanced 
surveillance in accordance with Regulation (EU) No 472/2013. Enhanced surveillance 
has served to monitor the implementation of specific commitments given by Greece to 
the Eurogroup on 22 June 2018 to  complete key  structural  reforms  started under the 
programme.  The  implementation  of  these  commitments,  by  agreed  deadlines  up  to 
mid-2022, serves as a basis for debt relief; thus, Greece has entered the final  year of 
this arrangement. As reported in the 14th enhanced surveillance report published on 23 
May 2022, despite the difficult circumstances of the pandemic and more recently the 
economic  impact  of  Russia’s  military  aggression  against  Ukraine,  Greece  has 
effectively implemented the bulk of the policy commitments, which has improved the 

21 

Regulation  (EU)  2021/1060  of  the  European  Parliament  and  of  the  Council  of  24  June  2021  laying 
down  common  provisions  on  the  European  Regional  Development  Fund,  the  European  Social  Fund 
Plus,  the  Cohesion  Fund,  the  Just  Transition  Fund  and  the  European  Maritime,  Fisheries  and 
Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the 
Internal  Security  Fund  and  the  Instrument  for  Financial  Support  for  Border  Management  and  Visa 
Policy. OJ L 231, 30.6.2021, p. 159. 

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resilience of the Greek economy and strengthened its financial stability. Nevertheless, 
some  elements  remain  to  be  fully  completed.  This  is  particularly  the  case  for 
completing  the  national  cadastre,  which  would  further  improve  Greece’s  businesses 
climate.  Progress  has  been  significant  in  the  past  years,  and  the  full  cadastre  is 
expected to be completed by December 2022. The implementation of the cadastre has 
been supported by EU Structural Funds. More recently, the Recovery and Resilience 
Facility provides support for digitalising registrations and deeds of property rights. In 
the context of the cadastre project, Greece also needs to finalise the cadastral mapping, 
the  operationalisation  of  the  cadastre  agency,  and  the  ratification  of  the  forest  maps 
covering the whole country. 

(27)  Beyond the economic and social challenges addressed by the recovery and resilience 
plan,  Greece  faces  a  number  of  additional  challenges  related  to  healthcare.  Out-of-
pocket  payments  in  Greece  are  still  high  and  account  for  more  than  a  third  of  total 
health care spending (35%)22. They are largely linked to pharmaceutical co-payments 
and direct payments for services outside the benefits package. In turn, this is linked to 
what  is  still  relatively  high  (compared  to  the  EU  average)  public  spending  on 
pharmaceuticals  and  to  relatively  low  (compared  to  the  EU  average)  spending  on 
therapeutic  care,  especially  on  outpatients.  A  well-functioning  primary  healthcare 
system covering the whole population and with an effective gatekeeping function can 
increase  efficiency  and  access  to  health  care  goods  and  services.  In  this  respect,  the 
full  implementation  of  the  amendments  of  the  primary  health  care  system  that  are 
expected  to  be  adopted  in  the  context  of  enhanced  surveillance  will  be  critical  for  a 
well-functioning health-care system. The reform follows previous efforts to establish a 
comprehensive  primary  health  care  system,  which  have,  however,  encountered 
implementation  challenges.  To  this  end,  expanding  the  stock  of  family  doctors  to 
achieve  full  population  coverage  and  population  registration  will  be  key  to  ensuring 
adequate and equal access to healthcare for the population.  

(28) 

In  response  to  the  mandate  by  the  EU  Heads  of  State  or  Government  set  out  in  the 
Versailles Declaration, the REPowerEU plan aims to phase out the European Union’s 
dependence on fossil fuel  imports from Russia as soon as possible. For this purpose, 
the most suitable projects, investments and reforms at national, regional and EU level 
are being identified in dialogue with the Member States. These measures aim to reduce 
overall reliance on fossil fuels and shift fossil fuel imports away from Russia. 

(29)  According to 2020 data, oil and gas make up 50% and 24% of Greece’s energy mix, 
respectively.  Greece’s  dependency  on  Russia  for  both  its  oil23  and  gas  imports  is 
slightly  below  the  EU  average  with  18%  compared  to  the  EU  average  of  26%  for 
crude  oil  and  39%  compared  to  44%  respectively  for  gas24.  87%  of  its  coal  imports 
come from Russia, but it domestically sources a large amount of lignite. To reduce its 
gas  dependency  from  Russia  and  diversify  its  energy  mix  away  from  fossil  fuels, 

22 

23 

24 

Figures from 2019 and part of the. State of Health in the EU, Greece: Country Health Profile, OECD, 
2021 (https://www.oecd.org/health/greece-country-health-profile-2021-4ab8ea73-en.htm). 
Eurostat  (2020),  share  of  Russian  imports  over  total  imports  of  crude  oil.  For  the  EU27  average,  the 
total imports are based on extra-EU27 imports. For Greece, total imports include intra-EU trade. Crude 
oil  does  not  include  refined  oil  products.  An  important  share  of  Greece’s  total  oil  imports  is  refinery 
feedstock.  Greece  is  highly  dependent  on  Russian  imports  for  these,  with  86%  of  total  refinery 
feedstock imports coming from Russia. 
Eurostat (2020), share of Russian imports over total imports of natural gas and hard coal. For the EU27 
average, the total imports are based on extra-EU27 imports. For Greece, total imports include intra-EU 
trade. Crude oil does not include refined oil products. 

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including  achieving  its  commitment  to  phase  out  of  all  lignite-based  electricity 
production by 2028, a number of measures could be further pursued that build and go 
beyond the investments and reforms that are part of Greece’s recovery and resilience 
plan. First, Greece could accelerate the expansion of renewable energy and speed up 
the  establishment  of  an  organised  market  platform  facilitating  bilateral  power 
purchasing  agreements  for  renewable  electricity.  Permitting  reforms  included  in  the 
Greek  recovery  and  resilience  plan  will  reduce  obstacles  to  investment  in  the 
renewable  energy  sector.  There  is  scope  for  Greece  to  start  developing  hydrogen 
infrastructure, in particular in Greek ports, to facilitate the transport of hydrogen. The 
Greek  merchant  fleet  could  facilitate  the  transport  of  such  green  energy  carriers  to 
Greece  and  onwards  to  other  EU  Member  States.  Planned  infrastructure  investments 
by the network operators could be expedited and expanded in scope, in particular the 
installation of sub-stations. Also the average time needed by the network operators to 
process  and  finalise  the  terms  of  connection  for  new  renewable  energy  installations 
could be reduced. Additional electricity interconnections with neighbouring countries 
would allow for increased renewable energy to be taken on by the grid. Greece needs 
to  accelerate  the  diversification  of  gas  routes  by  swiftly  completing  existing 
investments at an advanced phase. New infrastructure and network investment related 
to  gas  is  recommended  to  be  future-proof  where  possible,  in  order  to  facilitate  their 
long-term  sustainability  through  future  repurposing  for  sustainable  fuels.  Third, 
Greece could expand the scope and ambition of existing energy saving measures and 
reduce the high level of energy poverty (17.1% in 2020), including by using cohesion 
policy funds, as appropriate, for example, to renovate building stock. Existing market 
barriers  limiting  the  scope  of  renovations  for  specific  segments  could  be  mitigated 
through targeted legislative and financial incentives.  Further increase in ambition for 
reducing  greenhouse  gas  emissions  and  increasing  renewable  energy  and  energy 
efficiency will be needed for Greece to be in line with the ‘Fit for 55’ objectives’. In 
addition,  there  is  a  need  to  speed  up  decarbonisation  in  the  transport  sector,  which 
remains  heavily  reliant  on  oil,  by  promoting  sustainable  mobility,  including  public 
transport and railway projects. 

(30)  While  the  acceleration  of  the  transition  towards  climate  neutrality  and  away  from 
fossil  fuels  will  create  significant  restructuring  costs  in  several  sectors,  Greece  can 
make  use  of  the  Just  Transition  Mechanism  in  the  context  of  cohesion  policy  to 
alleviate the socio-economic impact  of the transition  in  the most  affected  regions.  In 
addition,  Greece  can  make  use  of  the  European  Social  Fund  Plus  to  improve 
employment opportunities and strengthen social cohesion. 

(31) 

(32) 

In  the  light  of  the  Commission’s  assessment,  the  Council  has  examined  the  2022 
Stability Programme and its opinion25 is reflected in recommendation (1) below.  

In view of the close interlinkages between the economies of euro area Member States 
and  their  collective  contribution  to  the  functioning  of  the  Economic  and  Monetary 
Union,  the  Council  recommended  that  the  euro  area  Member  States  take  action, 
including 
the 
recommendation on the economic policy of the euro area. For Greece, this is reflected 
in particular in recommendations 1 and 2 below. 

resilience  plans, 

recovery  and 

implement 

through 

their 

to 

(33) 

In the light of the Commission’s in-depth review and this assessment, the Council has 
examined  the  2022  National  Reform  Programme  and  the  2022  Stability  Programme. 

25 

Under Article 5(2) of Council Regulation (EC) No 1466/97. 

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Its recommendations under Article 6 of Regulation (EU) No 1176/2011  are reflected 
in recommendations 1, 2 and 4 below. The recommendations 1 and 2 also contribute to 
the  implementation  of  the  Recommendation  for  the  euro  area,  in  particular  the  first, 
second  and  fourth  euro  area  recommendations.  Fiscal  policies  referred  to  in 
recommendations  1  and  2  help  inter-alia  address  imbalances  linked  to  the  high 
government  debt  and  the  incomplete  external  rebalancing,  while  also  facilitating 
addressing  the  high  unemployment  and  low  potential  growth.  Policies  referred  to  in 
recommendation 4 help inter alia address vulnerabilities linked to high external debt in 
the longer term. 

HEREBY RECOMMENDS that Greece take action in 2022 and 2023 to:  

1. 

2. 

3. 

In  2023,  ensure  prudent  fiscal  policy,  in  particular  by  limiting  the  growth  of 
nationally-financed current expenditure below medium-term potential output growth, 
taking  into  account  continued  temporary  and  targeted  support  to  households  and 
firms  most  vulnerable  to  energy  price  hikes  and  to  people  fleeing  Ukraine.  Stand 
ready to adjust current spending to the evolving situation. Expand public investment 
for the green and digital transition and for energy security, including by making use 
of the RRF, RePowerEU and other EU funds. For the period beyond 2023, pursue a 
fiscal policy aimed at achieving prudent medium-term fiscal positions and ensuring 
credible  and  gradual  debt  reduction  and  fiscal  sustainability  in  the  medium  term 
through  gradual  consolidation,  investment  and  reforms.  Building  on  reforms 
undertaken  as  part  of  the  recovery  and  resilience  plan,  improve  the  investment-
friendliness of the taxation system by introducing an advance tax ruling system and 
review the structure of the tax burden on the self-employed. Safeguard the efficiency 
of  the  public  administration  while  ensuring  it  can  attract  the  right  skills  and 
preserving consistency with the unified wage grid. 

Proceed with the implementation of its recovery and resilience plan, in line with the 
milestones  and  targets  included  in  the  Council  Implementing  Decision  of  13  July 
2021.  Swiftly  finalise  the  negotiations  with  the  Commission  of  the  2021-2027 
cohesion  policy  programming  documents  with  a  view 
their 
implementation.  Complete  outstanding  reforms  that  have  been  pursued  under 
enhanced surveillance, including the cadastre reform 

to  starting 

With  a  view  to  ensuring  adequate  and  equal  access  to  health  care,  complete  the 
rollout of the primary health-care reform in line with the framework amended under 
enhanced  surveillance, 
including  staffing  of  all  primary  healthcare  units, 
implementing  population  registration  and  introducing  effective  gatekeeping  by 
general practitioners. 

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4. 

Reduce  overall  reliance  on  fossil  fuels,  and  diversify  imports  of  fossil  fuels  by 
accelerating deployment of renewable energy and the development of infrastructure 
that  would  enable  renewable  hydrogen.  Also  address  dependency  through  ensuring 
sufficient  capacity  of  electricity  networks  and  interconnections  as  well  as  gas 
interconnections  and diversifying  gas supply  routes.  Strengthen the energy  services 
market  framework  and  step  up  energy  efficiency-enhancing  measures  through 
reforms  and market incentives to support the decarbonisation of the building sector 
and the transport sector, particularly by promoting electric mobility. 

Done at Brussels, 

For the Council 
The President 

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