Recommendation for a COUNCIL RECOMMENDATION on the 2023 National Reform Programme of Greece and delivering a Council opinion on the 2023 Stability Programme of Greece
Date: 2023-05-24
Institutions: European Commission, Secretariat-General
Subjects: Greece, economic policy, economic recovery, economic reform, energy policy, fiscal policy, health care, land register, stability pact, stability programme

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   EUROPEAN COMMISSION  Brussels, 24.5.2023  COM(2023) 608 final  Recommendation for a COUNCIL RECOMMENDATION on the 2023 National Reform Programme of Greece and delivering a Council opinion on the 2023 Stability Programme of Greece {SWD(2023) 608 final}  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the 2023 National Reform Programme of Greece and delivering a Council opinion on 
the 2023 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 to the Member 
States  for  the  implementation  of  reforms  and  investments,  entailing  a  fiscal  impulse 
financed by the EU. In line with the European Semester priorities, it contributes to the 
economic  and  social  recovery  and  to  the  implementation  of  sustainable  reforms  and 
investments,  in  particular  to  promote  the  green  and  digital  transition  and  make  the 
Member States’ economies more resilient. It also helps strengthen public finances and 
boost  growth  and  job  creation  in  the  medium  and  long  term,  improve  territorial 
cohesion  within  the  EU  and  support  the  continued  implementation  of  the  European 
Pillar of Social Rights. The maximum financial contribution per Member State under 
the Recovery and Resilience Facility was updated on 30 June 2022 in accordance with 
Article 11(2) of Regulation (EU) 2021/241.  

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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(2) 

On 22 November 2022, the Commission adopted the 2023 Annual Sustainable Growth 
Survey4,  marking  the  start  of  the  2023  European  Semester  for  economic  policy 
coordination. The European Council endorsed the priorities of the  survey  around the 
four  dimensions  of  competitive  sustainability  on  23  March  2023.  On  22  November 
2022,  on  the  basis  of  Regulation  (EU)  No  1176/2011,  the  Commission  also  adopted 
the 2023 Alert Mechanism Report, in which it identified Greece as one of the Member 
States that may be affected or may be at risk of being affected by imbalances, and for 
which an in-depth  review would be needed. On  the same date, the Commission also 
adopted  an  opinion  on  Greece’s  2023  draft  budgetary  plan.  The  Commission  also 
adopted a recommendation for a Council recommendation on the economic policy of 
the euro area, which the Council adopted on 16 May 2023, as well as the proposal for 
the 2023 Joint Employment Report analysing the implementation of the Employment 
Guidelines  and  the  principles  of  the  European  Pillar  of  Social  Rights,  which  the 
Council adopted on 13 March 2023.  

(3)  While the  EU economies are showing remarkable resilience, the  geopolitical  context 
continues  to  have  a  negative  impact.  As  the  EU  stands  firmly  with  Ukraine,  the  EU 
economic  and  social  policy  agenda  is  focused  on  reducing  the  negative  impact  of 
energy shocks on both vulnerable households and companies in the short term, and on 
keeping  up  efforts  to  deliver  on  the  green  and  digital  transition,  support  sustainable 
and inclusive growth, safeguard macroeconomic stability and increase resilience in the 
medium  term.  It  also  focuses  heavily  on  increasing  the  EU’s  competitiveness  and 
productivity. 

(4) 

On  1  February  2023,  the  Commission  issued  the  Communication  A  Green  Deal 
Industrial  Plan  for  the  Net-Zero  Age5  to  boost  the  competitiveness  of  the  EU’s  net-
zero  industry  and  support  the  fast  transition  to  climate  neutrality.  The  plan 
complements  ongoing  efforts  under  the  European  Green  Deal  and  REPowerEU.  It 
aims to provide a more supportive environment for scaling up the EU’s manufacturing 
capacity  for  the  net-zero  technologies  and  products  required  to  meet  the  EU’s 
ambitious climate targets, as well as ensuring access to relevant critical raw materials, 
including  by  diversifying  sourcing,  properly  exploiting  geological  resources  in 
Member States and maximising the recycling of raw materials. The plan  is  based on 
four pillars:  a predictable and simplified regulatory  environment,  speeding up access 
to finance, enhancing skills, and open trade for resilient supply chains.  On 16 March 
2023,  the  Commission  also  issued  the  Communication  Long-term  competitiveness  of 
the EU: looking beyond 20306, structured along nine mutually reinforcing drivers with 
the objective to work towards a growth enhancing regulatory framework. It sets policy 
improvements,  well  focused 
priorities  aimed  at  actively  ensuring  structural 
investments and regulatory measures for the long-term competitiveness of the EU and 
its Member States. The recommendations below help address those priorities. 

(5) 

In 2023, the European Semester for economic policy coordination continues to evolve 
in  line  with  the  implementation  of  the  Recovery  and  Resilience  Facility.  Fully 
implementing  the  recovery  and  resilience  plans  remains  essential  for  delivering  the 
policy priorities under the European Semester, as the plans address all or a significant 
subset  of  the  relevant  country-specific  recommendations  issued  in  recent  years.  The 
2019, 2020 and 2022 country-specific recommendations remain equally relevant also 

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COM(2022) 780 final. 
COM(2023) 62 final.  
COM(2023) 168 final.  

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(6) 

(7) 

for  recovery  and  resilience  plans  revised,  updated  or  amended  in  accordance  with 
Articles 14, 18 and 21 of Regulation (EU) 2021/241.  
The REPowerEU Regulation7 adopted on 27 February 2023 aims to rapidly phase out 
the  EU’s  dependence  on  Russian  fossil  fuel  imports.  This  will  contribute  towards 
energy security and the diversification of the EU’s energy supply, while increasing the 
uptake of renewables, energy storage capacities and energy efficiency. The Regulation 
enables  Member  States  to  add  a  new  REPowerEU  chapter  to  their  national  recovery 
and  resilience  plans  in  order  to  finance  key  reforms  and  investments  that  will  help 
achieve the REPowerEU objectives. They will also help boost the competitiveness of 
the EU’s net-zero industry as outlined in the Green Deal  Industrial Plan for the Net-
Zero Age and address the energy-related country-specific recommendations issued to 
the  Member  States  in  2022  and,  where  applicable,  in  2023.  The  REPowerEU 
Regulation  introduces  a  new  category  of  non-repayable  financial  support,  made 
available  to  Member  States  to  finance  new  energy-related  reforms  and  investments 
under their recovery and resilience plans.  

On 8 March 2023, the Commission adopted a communication providing fiscal policy 
guidance for 2024. It aims to support the preparation of Member States’ stability and 
thereby  strengthen  policy  coordination8.  The 
convergence  programmes  and 
Commission recalled that the general escape clause of the Stability and Growth Pact 
will be deactivated at  the end of 2023.  It  called  for fiscal  policies in  2023-2024 that 
ensure  medium-term  debt  sustainability  as  well  as  raise  potential  growth  in  a 
sustainable manner. Member States were invited to set out in their 2023 stability and 
convergence programmes how their fiscal plans will ensure that the 3% of GDP deficit 
reference value is adhered to as well as plausible and continuous debt reduction, or for 
debt  to  be  kept  at  prudent  levels  in  the  medium  term.  The  Commission  invited 
Member States to phase out national fiscal measures introduced to protect households 
and  firms  from  the  energy  price  shock,  starting  with  the  least  targeted  ones.  It 
indicated that, if support measures needed to be extended because of renewed energy 
price  pressures,  Member  States  should  target  such  measures  much  better  than  in  the 
past  towards  vulnerable  households  and  firms.  The  Commission  proposed  that  the 
fiscal  recommendations would be  quantified and differentiated  and be  formulated on 
the basis of net primary expenditure, as proposed in its Communication on orientations 
for  a  reform  of  the  EU  economic  governance  framework9.  It  recommended  that  all 
Member States should  continue to  protect  nationally  financed investment and ensure 
the  effective  use  of  the  Recovery  and  Resilience  Facility  and  other  EU  funds,  in 
particular  in  light  of  the  green  and  digital  transition  and  resilience  objectives.  The 
Commission  indicated  that  it  will  propose  to  the  Council  to  open  deficit-based 
excessive deficit procedures in spring 2024 on the basis of the outturn data for 2023, in 
line with existing legal provisions. 

(8) 

On  26  April  2023,  the  Commission  presented  legislative  proposals  to  implement  a 
comprehensive reform of the EU’s economic governance rules. The central objective 
of the proposals is to strengthen public debt sustainability and promote sustainable and 

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Regulation  (EU)  2023/435  of  the  European  Parliament  and  of  the  Council  of  27  February  2023 
amending Regulation (EU) 2021/241 as regards REPowerEU chapters in recovery and resilience plans 
and  amending  Regulations  (EU)  No  1303/2013,  (EU)  2021/1060  and  (EU)  2021/1755,  and  Directive 
2003/87/EC (OJ L 63, 28.2.2023, p. 1). 
COM(2023) 141 final. 
COM(2022) 583 final. 

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(9) 

inclusive growth in all Member States through reforms and investments. The proposals 
aim at providing Member States with more control over the design of their medium-
term plans, while putting in place a more stringent enforcement regime to ensure that 
Member  States  deliver  on  the  commitments  undertaken  in  their  medium-term  fiscal-
structural plans. The objective is to conclude the legislative work in 2023.  

On  30  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, 
effectiveness,  efficiency  and  coherence  of  the  recovery  and  resilience  plan,  in 
accordance with the assessment guidelines of Annex V to that Regulation. On 13 July 
2021,  the  Council  adopted  its  Decision  on  the  approval  of  the  assessment  of  the 
recovery and resilience plan for Greece10. 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  reached  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 2 May  2023, Greece submitted its 2023 National Reform Programme and, on  29 
April 2023, its 2023 Stability Programme, in line with Article 4(1) 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 
2023  National  Reform  Programme  also  reflects  Greece’s  biannual  reporting  on  the 
progress made in achieving its recovery and resilience plan.  

in 

addressing 

(11)  The Commission published the 2023 country report for Greece11 on 24 May 2023. It 
assessed  Greece’s  progress 
country-specific 
recommendations adopted by the Council between 2019 and 2022, and took stock of 
Greece’s implementation of the recovery and  resilience plan.  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. 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.  

relevant 

the 

(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  24  May  202312.  It  concluded 
that  Greece  is  experiencing  excessive  macroeconomic  imbalances.  In  particular, 
vulnerabilities  relating  to  high  government  debt  and  a  high  stock  of  non-performing 
loans  in  the  context  of  high  unemployment  have  been  receding,  but  its  external 
position  has  deteriorated.  A  key  concern  is  that  the  current  account  deficit  markedly 
widened in 2022, despite the recovery in tourism revenue. Even though it is forecast to 
narrow somewhat this year and next, the external deficit is set to stay well above the 
level  that  is  required  to  ensure  a  lasting  improvement  in  the  net  international 
investment  position. While the government  debt-to-GDP ratio remains the highest  in 

10 

11 
12 

Council Implementing Decision of 13 July 2021 on the approval of the assessment of the recovery and 
resilience plan for Greece (ST 10152/21; ST 10152/21 ADD 1). 
SWD(2023) 608 final. 
SWD(2023) 631 final. 

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the EU, it improved markedly in 2022, largely thanks to strong nominal GDP growth, 
and it is expected to recede further in 2023 and 2024. Non-performing loans recorded 
a sharp fall last year building on large reductions in earlier years, yet remain high and 
continue to weigh on banks’ profitability and lending capacity, which in turn impinges 
on the capital deepening and on the productivity growth of the economy. The policy 
response  has  contributed  to  the  unwinding  of  imbalances  and  the  implementation  of 
the RRP represents a major opportunity to tackle remaining structural weaknesses. Yet 
more  efforts  are  needed,  in  particular  to  ensure  that  external  balances  are  put  on  a 
firmly  improving  path,  and  that  non-performing  loans  decline  further  including 
through increasing the effectiveness of debt enforcement and improving the secondary 
non-performing loans market.  

(13)  Based on data validated by Eurostat,13 Greece’s general government deficit decreased 
from 7.1% of GDP in 2021 to 2.3% in 2022, while general government debt fell from 
194.6% of GDP at the end of 2021 to 171.3% at the end of 2022. 

(14)  The  general  government  balance  has  been  impacted  by  the  fiscal  policy  measures 
adopted to mitigate the economic and social impact of the increase in energy prices. In 
2022,  such  expenditure-increasing  measures 
to 
households  and  businesses,  increased  social  benefits  to  vulnerable  households.  The 
cost  of  these  measures  was  partly  offset  by  new  taxes  on  windfall  profits  of  energy 
producers  and  suppliers,  namely  the  price  cap  on  electricity  producers  and  the 
extraordinary levy on electricity producers for the period October 2021 to June 2022. 
The Commission estimates the net budgetary cost of these measures at 2.5% of GDP 
in  2022.  At  the  same  time,  the  estimated  cost  of  COVID-19  temporary  emergency 
measures dropped to 1.5% of GDP in 2022, from 6.5% in 2021. 

included  electricity  subsidies 

(15)  On 18 June 2021, the Council recommended that in 2022 Greece14 use the Recovery 
and  Resilience  Facility  to  finance  additional  investment  in  support  of  the  recovery, 
while  pursuing  a  prudent  fiscal  policy.  Moreover,  Greece  should  preserve  nationally 
financed investment. 

(16)  According to the Commission estimates, the fiscal stance15 in 2022 was supportive, at 
– 1.0%  of  GDP.  As  recommended  by  the  Council,  Greece  continued  to  support  the 
recovery  with  investments  to  be  financed  by  the  Recovery  and  Resilience  Facility. 
Expenditure financed by Recovery and Resilience Facility grants and other EU funds 
amounted  to  2.1%  of  GDP  in  2022  (2.6%  of  GDP  in  2021).  The  decrease  in 
expenditures financed by Recovery and Resilience Facility grants and other EU funds 
in  2022  was  due  to  the  phasing  out  of  the  previous  programming  period  while 
investment  expenditure  in  the  new  programming  period  has  not  yet  picked  up. 
Nationally  financed  investment  provided  an  expansionary  contribution  of  0.6 
percentage points to the fiscal stance.16 Greece therefore preserved nationally financed 

13 
14 

15 

16 

Eurostat-Euro Indicators, 47/2023, 21.4.2023 
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.  
The  fiscal  stance  is  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, 
in 
the Fiscal Statistical Tables.   
Other nationally financed capital expenditure provided a neutral contribution of 0.0 percentage points of 
GDP 

growth. For  more 

to  medium-term 

see  Box 1 

potential 

relative 

details 

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investment,  as  recommended  by  the  Council.  At  the  same  time,  the  growth  in 
nationally  financed  primary  current  expenditure  (net  of  new  revenue  measures) 
provided  an  expansionary  contribution  of  0.6  percentage  points  to  the  fiscal  stance. 
This  significant  expansionary  contribution  included  the  additional  impact  of  fiscal 
policy measures to mitigate the economic and social impact of the increase in energy 
prices  (additional  net  budgetary  cost  of  2%  of  GDP).  Greece  therefore  sufficiently 
limited the growth in nationally financed current expenditure. 

(17)  The macroeconomic scenario underpinning the budgetary projections in  the Stability 
Programme is realistic in 2023 and optimistic thereafter. The government projects real 
GDP to grow by 2.3% in 2023 and 3% in 2024. By comparison, the Commission 2023 
spring forecast projects a higher real GDP growth of 2.4% in 2023 and a lower 1.9% 
in  2024,  mainly  due  to  differences  in  the  assumptions  on  investment  activity  and 
contributions from the external sector. The 2023 Stability Programme forecasts higher 
contributions  from  gross  fixed  capital  formation,  especially  in  2024,  and  the 
Commission expects  goods’ imports to remain more elevated than in  the authorities’ 
projections . 

(18) 

In its 2023 Stability Programme, the government expects that the general government 
deficit  ratio  will  decrease  to  1.8%  of  GDP  in  2023.  The  decrease  in  2023  mainly 
reflects  the phasing out of the pandemic-related fiscal  measures and the reduction of 
the  cost  of  the  energy-related  measures  as  well  as  the  increasing  revenues  due  to 
economic growth. According to the Programme, the general government debt-to-GDP 
ratio is expected to decrease from 171.3% at the end of 2022 to 162.6% at the end of 
2023. The Commission 2023 spring forecast projects a government deficit of 1.3% of 
GDP  for  2023.  This  is  lower  than  the  deficit  projected  in  the  Stability  Programme, 
mainly  due  to  more  favourable  evolution  of  tax  bases  driven  by  the  macroeconomic 
assumptions, including the composition of growth and lower expenditures of the social 
budget  in  line  with  the  systematic  underspending  observed  in  the  past  years.  The 
Commission  2023  spring  forecast  projects  a  lower  general  government  debt-to-GDP 
ratio, of 160.2% at the end of 2023. The difference is mainly due to the higher nominal 
GDP growth, and to a smaller extent, the lower general government deficit forecast by 
the Commission. 

(19)  The government balance in 2023 is expected to continue to be impacted by the fiscal 
measures adopted to mitigate the economic and social impact of the increase in energy 
prices.  They  consist  of  measures  extended  from  2022  (in  particular:  the  electricity 
subsidies  to  households  and  businesses).  The  cost  of  these  measures  continues  to  be 
partly offset by taxes on windfall profits of energy suppliers, namely the price cap on 
electricity  producers  and  the  solidarity  contribution  from  refineries.  Taking  these 
revenues into account, the net budgetary cost of the support measures is projected in 
the  Commission  2023  spring  forecast  at  0.2%  of  GDP  in  202317.  Most  measures  in 
2023 do not appear to be targeted to the most vulnerable households or firms, and do 
not  fully  preserve  the  price  signal  to  reduce  energy  demand  and  increase  energy 
efficiency.  As  a  result,  the  amount  of  targeted  support  measures,  to  be  taken  into 
account  in  the  assessment  of  compliance  with  the  recommendation  for  2023,  is 
estimated in the Commission 2023 spring forecast at 0.1% of GDP in 2023 (compared 
to 0.5% of GDP in 2022). Finally, the 2023 government balance is expected to benefit 
from the phasing out of COVID-19 temporary emergency measures of 1.5% of GDP. 

17 

The  figure represents the level of annual budgetary cost of those  measures, including current revenue 
and expenditure as well as – where relevant – capital expenditure measures. 

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(20)  On  12  July  2022,  the  Council  recommended18  that  Greece  ensure  in  2023  a  prudent 
fiscal  policy,  in  particular  by  limiting  the  growth  of  nationally  financed  primary 
current expenditure below medium-term potential output growth19, taking into account 
continued temporary and targeted support to households and firms most vulnerable to 
energy  price  hikes  and  to  people  fleeing  Ukraine.  At  the  same  time,  Greece  should 
stand  ready  to  adjust  current  spending  to  the  evolving  situation.  Greece  was  also 
recommended  to  expand  public  investment  for  the  green  and  digital  transitions,  and 
for  energy  security  taking  into  account  the  REPowerEU  initiative,  including  by 
making use of the Recovery and Resilience Facility and other Union funds. 

(21) 

In  2023,  the  fiscal  stance  is  projected  in  the  Commission  2023  spring  forecast  to  be 
broadly  neutral  (- 0.2%  of  GDP),  in  a  context  of  high  inflation.  This  follows  an 
expansionary fiscal stance in 2022 (- 1.0% of GDP). The growth in nationally financed 
primary  current  expenditure  (net  of  discretionary  revenue  measures)  in  2023  is 
projected to provide a contractionary contribution of 0.3 % of GDP to the fiscal stance. 
Therefore, the projected growth of nationally financed primary current expenditure is 
in  line  with  the  recommendation  of  the  Council.  The  projected  contractionary 
contribution of nationally financed primary current expenditure is due, in substance, to 
the reduced costs of the (targeted and untargeted) support measures to households and 
firms  in  response  to  energy  price  hikes  (by  2.3%  of  GDP).  The  increase  in  social 
spending  is  the  main  driver  of  growth  in  nationally  financed  primary  current 
expenditure  (net  of  new  revenue  measures).  Expenditure  financed  by  Recovery  and 
Resilience  Facility  grants  and  other  EU  funds  amounted  to  2.5%  of  GDP  in  2023, 
while  nationally  financed  investment  provided  a  neutral  contribution  to  the  fiscal 
stance  of  0.0 percentage  point20.  Therefore,  Greece  plans  to  finance  additional 
investment through the Recovery and Resilience Facility and other EU funds, and it is 
projected  to  preserve  nationally  financed  investment.  It  plans  to  finance  public 
investment  for  the  green  and  digital  transitions,  and  for  energy  security,  such  as  the 
installation of 8 000 publicly accessible charge points for electric vehicles in key urban 
and  suburban  locations,  digitalisation  of  public  administration,  and  improving  the 
electricity interconnection of islands. 

(22)  According  to  the  Stability  Programme  the  general  government  deficit  is  expected  to 
decline to 0.8% of GDP in 2024. The decrease in 2024 mainly reflects the phasing out 
of the remaining energy and other measures and the increase of revenues on the back 
of the solid economic growth. The programme expects the general government debt-
to-GDP  ratio  to  decrease  to  150.8%  at  the  end  of  2024.  Based  on  policy  measures 
known  at  the  cut-off  date  of  the  forecast,  the  Commission  2023  spring  forecast 
projects a government deficit of 0.6% of GDP in 2024. This is lower than the deficit 
projected  in  the  programme,  mainly  due  to  the  assumptions  on  the  execution  of  the 
social  budget,  most  notably  lower  spending  on  social  benefits  and  on  pensions.  The 
Commission 2023 spring forecast projects a higher general  government  debt-to-GDP 
ratio, of 154.5% at the end of 2024.  

18 

19 

20 

Council  Recommendation  of  12  July  2022  on  the  National  Reform  Programme  of  Greece  and 
delivering a Council opinion on the 2022 Stability Programme of Greece, OJ C 334, 1.9.2022, p. 60.  
Based  on  the  Commission  2023  spring  forecast,  the  medium-term  (10-year  average)  potential  output 
growth of Greece is estimated at 4.8% in nominal terms.  
Other  nationally  financed  capital  expenditure  is  projected  to  provide  an  expansionary  contribution  of 
0.1 percentage point of GDP 

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(23)  The  Stability  Programme  envisages  the  phasing  out  of  all  of  the  energy  support 
measures in  2024. The  Commission  also  assumes full  phasing out  of energy support 
measures  in  2024.  This  hinges  upon  the  assumption  of  no  renewed  energy  price 
increases. 

(24) 

into  account 

 Council  Regulation  (EC)  No  1466/97  calls  for  an  annual  improvement  in  the 
structural  budget  balance  toward  the  medium-term  objective  by  0.5%  of  GDP  as  a 
benchmark.21  Taking 
fiscal  sustainability  considerations,22  an 
improvement  in  the  structural  balance  of  at  least  0.3%  of  GDP  for  2024  would  be 
appropriate.  To  ensure  such  an  improvement,  the  growth  in  net  nationally  financed 
primary  expenditure23  in  2024  should  not  exceed  2.6%,  as  reflected  in  this 
recommendation.  This  will  also  contribute  to  strengthening  the  external  position.  At 
the  same  time,  the  remaining  energy  support  measures  (currently  estimated  by  the 
Commission  at  0.2%  of  GDP  in  2023)  should  be  phased  out,  contingent  on  energy 
market developments and starting from the least targeted ones, and the related savings 
should be used to reduce the government deficit.  

(25)  Assuming  unchanged  policies,  the  Commission  2023  spring  forecast  projects  net 
nationally financed primary expenditure to grow at 0.7% in 2024, which is below the 
recommended  growth  rate.  The  adjustment  projected  in  the  Commission  forecast  is 
more than the savings from the full phasing out of energy support measures 

(26)  According  to  the  programme,  government  investment  is  expected  to  increase  from 
4.8% of GDP in 2023 to 5.4% of GDP in 2024. The higher investment reflects slightly 
lower  nationally  financed  investment  and  higher  investment  financed  by  the  EU, 
namely  through  the  Recovery  and  Resilience  Facility.  The  programme  refers  to 
reforms  and  investments,  that  are  expected  to  contribute  to  fiscal  sustainability  and 
sustainable  and  inclusive  growth.  These  include  high-value  added  investments  and 
structural reforms towards the green, digital and energy transitions, which are also part 
of the Recovery and Resilience Plan. 

(27)  The Stability Programme outlines a medium-term fiscal path until 2026. According to 
the programme, the general government deficit is expected to decline to 0.5% of GDP 
in 2025 and to 0.1% by 2026. The general government deficit is therefore planned to 
remain below 3% of GDP over the programme horizon. According to the programme, 
the general government debt-to-GDP ratio is expected to decrease from 150.8% at the 
end of 2024 to 135.2% by the end of 2026. 

(28)  Building  on  best  practices  and  reforms  undertaken  as  part  of  the  recovery  and 
resilience plan, modifications to 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 increase ongoing efforts to simplify 
the  tax  system.  A  review  of  the  tax  system  could  also  help  enlarge  the  tax  base  as 

21 

22 

23 

Cf. Article 5 of Council Regulation (EC) No 1466/97, which also requires an adjustment of  more than 
0.5%  of  GDP  for  Member  States  with  a  government  debt  exceeding  60%  of  GDP,  or  with  more 
pronounced debt sustainability risks. 
The Commission estimated that Greece would not need an increase in the structural primary balance as 
a share of GDP to achieve a plausible debt reduction in the medium term. This estimate was based on 
the  Commission  autumn  2022  forecast.  The  starting  point  for  this  estimate  was  the  projected 
government  deficit  and  debt  for  2024  which  assumed  the  withdrawal  of  energy  support  measures  in 
2024.  
Net  primary  expenditure  is  defined  as  nationally  financed  expenditure  net  of  discretionary  revenues 
measures and excluding interest expenditure as well as cyclical unemployment expenditure. 

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regards the self-employed and support investment. Tax compliance could be improved 
by extending the application of electronic payments and making increased use of the 
information that originates from electronic payments, considering in particular recent 
evidence  of  a  growing  disparity  between  declared  low  incomes  and  the  apparently 
rapidly rising turnover of the self-employed. In particular, by making better use of the 
information  that  originates  from  electronic  payments  for  targeted  professions.  The 
ongoing  digital  transformation  of  the  Independent  Authority  for  Public  Revenue  is 
expected  to  contribute  among  other  things  to  this  objective.  However,  it  is  essential 
that the authority’s autonomy to  manage and develop  its  HR and  IT infrastructure  is 
further increased given the ongoing challenges to tax systems worldwide.  

(29)  Greece  has  continued  to  take  steps  to  modernise  its  public  administration,  but  its 
overall  performance  remains  low.  Following  a  significant  adjustment  after  2010,  the 
size and cost of public administration has been broadly aligned with the EU average. 
Greece’s wage bill remained stable in 2022 at 10.8% of GDP, slightly above the EU 
average  (10.2%  of  GDP).  Ensuring  continued  application  of  the  unified  wage  grid, 
while  maintaining  current  staffing  levels  through  the  continued  application  of  the 
‘one-in-one-out’ hiring rule for permanent staff and of the ceiling for temporary staff 
that was introduced in 2022, will be key to safeguarding these gains. The recovery and 
resilience  plan  contains  measures 
the  effectiveness  of  public 
administration, with  a particular focus  on improving its digital  services.  At the same 
time, attracting and maintaining high-calibre staff remains a challenge. This could be 
addressed  in  a  structural  manner  through  special/supplementary  wage  grids  for 
specific  functions  and/or  bodies  as  well  as  a  well-defined  system  of  allowances 
introduced as an integral part of the new HR management system, while safeguarding 
the integrity of the unified wage grid and the overall size of the wage bill.  

improve 

to 

(30) 

In accordance with Article 19(3), point (b) and Annex V, criterion 2.2 of Regulation 
(EU) 2021/241, the recovery and resilience plan includes an extensive set of mutually 
reinforcing reforms and investments to be implemented by 2026. The implementation 
of  Greece’s  recovery  and  resilience  plan  has  so  far  been  well  underway.  Going 
forward,  it  will  be  important  to  maintain  the  implementation  momentum.  Greece 
submitted  three  payment  requests24  for  non-repayable  financial  support  and  two 
payment requests for loan support, corresponding to 85 milestones and targets in the 
plan. To date, Greece has received an overall disbursement of EUR 7 126 million25. In 
accordance  with  Article  14(6)  of  Regulation  (EU)  2021/241,  on  29  March  2023, 
Greece expressed its intention to request EUR 5 000 million of additional loan support 
under  the  Recovery  and  Resilience  Facility.  Greece  has  made  a  solid  start  to 
implementing  its  plan  and  has  established  a  management  and  control  system  to 
monitor and coordinate the timely completion of the reforms and investments.  Going 
forward  it  will  be  important  to  maintain  and  enhance  these  efforts  considering  the 
significant number of reforms and investments that are planned to be implemented, in 
particular  as  the  completion  of  a  number  of  these  will  require  timely  progress  with 
various  preparatory  steps,  including  public  procurement  procedures.  The  continued 
implementation of the plan hinges on the administrative and implementation capacity 
of the assigned implementing bodies, including the regional and local administration. 

24 

25 

Greece  submitted  its  third  payment  request  for  grants  on  16  May  2023  and  the  assessment  by  the 
Commission is ongoing. 
For grants the disbursed amounts for non-reimbursable financial support (excl. pre-financing) is EUR 
3 436 million and the disbursed amounts for loan support (excl. pre-financing) is EUR 3 690 million. 

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The swift inclusion of the new REPowerEU chapter in the recovery and resilience plan 
will  allow  additional  reforms  and  investments  to  be  financed  in  support  of  Greece’s 
strategic objectives in the field of energy and the green transition. The systematic and 
effective  involvement  of  local  and  regional  authorities,  social  partners  and  other 
relevant  stakeholders  remains  important  for  the  successful  implementation  of  the 
recovery  and  resilience  plan,  as  well  as  other  economic  and  employment  policies 
going beyond the plan, to ensure broad ownership of the overall policy agenda.  

(31)  The Commission approved all of Greece’s cohesion policy programming documents in 
2022. Proceeding with the swift implementation of the cohesion policy programmes in 
complementarity  and  synergy  with  the  recovery  and  resilience  plan,  including  the 
REPowerEU  chapter,  is  key  to  achieving  the  green  and  digital  transition,  increasing 
economic and social resilience as well as achieving balanced territorial development in 
Greece. 

(32)  Beyond the economic and social challenges addressed by the recovery and resilience 
plan,  Greece  faces  a  number  of  additional  challenges  related  to  healthcare  and  long-
term care, cadastral mapping, energy policy and the green transition.  

(33)  Public healthcare spending is below the EU average, while the out-of-pocket payments 
made by patients in Greece are the second highest in the EU as a share of  GDP. The 
healthcare  system  is  still  hospital-centric,  with  curative  care  spending  focused  on 
hospitalisation.  In  addition,  Greece  ranks  first  among  all  Member  States  for  public 
spending  on  medicines  as  a  share  of  GDP.  Public  expenditure  on  long-term  and 
preventive care is significantly below the EU average, and there is no comprehensive 
national strategy for long-term care in place. To tackle this, Greece is implementing a 
newly adopted primary healthcare system to reduce the reliance on hospital care and 
increase the efficiency of access to healthcare goods and services. The full roll-out of 
the  primary  healthcare  reform  is  hindered  by  the  shortage  of  family  doctors.  The 
number  of  family  doctors  is  not  sufficient  to  cover  the  entire  population.  Sufficient 
coverage will be necessary for the full introduction of an effective and comprehensive 
gatekeeping-based  system  legislated  to  start  from  1  September  2023.  To  this  end, 
stronger incentives to expand the number 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.  

(34)  The  completion  of  the  national  cadastre  –  a  long-standing  project  –  will  further 
improve  Greece’s  business  climate.  By  the  end  of  May  2023,  71%  of  cadastral 
mapping had been completed, and another 25% of property rights had been collected 
and are currently being processed. The processing of the collected rights is expected to 
be completed by the end of 2023, which would complete the cadastre by the end of the 
year. On the transition to the new agency ‘Hellenic Cadastre’, 12 cadastral offices and 
49  branches  have  opened  and  are  operational.  The  Hellenic  Cadastre  plans  to  fully 
digitalise  the  services  to  citizens  and  the  Recovery  and  Resilience  Facility  provides 
support for  the digitalisation of all registrations and deeds of property rights  that are 
currently in paper form. 

(35)  Despite  the  efforts  made  by  Greece  also  in  the  context  of  the  energy  crisis,  Greece 
remains  highly  dependent  on fossil fuels, with  oil and  gas making up 52% and 24% 
respectively of its energy mix in 2021. To accelerate decarbonisation efforts, a number 
of measures could be further pursued that build on and go beyond the investments and 
reforms that are part of Greece’s recovery and resilience plan. Greece could accelerate 
the  expansion  of  renewable  energy  by  establishing  and  completing  the  legal 

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frameworks  to  promote  the  development  of  renewable  hydrogen  infrastructure  and 
offshore wind. Further efforts are needed to speed up the development of a legislative 
and  regulatory  framework  for  biomethane  and  turn  the  available  sustainable 
biomethane potential into actual production capacity to offset natural gas imports. 

(36)  As  more  renewables  are  integrated,  further  investments  to  expand  the  storage  and 
network capacity will be essential to safeguard the electricity grid’s balance. Common 
remuneration  schemes  and  the  promotion  of  behind-the-meter  systems  could  be 
important  tools  to  promote  the  timely  and  viable  expansion  of  storage  capacity.  To 
avoid  the  need  for  curtailment  of  renewables,  additional  electricity  interconnections 
with  neighbouring  countries  could  be  developed.  On  the  further  deployment  of 
renewable  energy  sources,  it  will  be  important  to  fully  enforce  the  new  legal 
framework adopted in 2022, which simplifies and accelerates the licensing process for 
renewable and storage projects. In addition, promotion of self-consumption schemes, 
including  expanding  support  for  the  installation  of  solar  photovoltaic  systems  with 
batteries,  and  energy  communities  could  help  boost  the  social  acceptability  of 
renewables deployment.  

(37)  Greece could also expand the scope and ambition of existing energy saving measures 
and reduce the high level of energy poverty. Greece’s consumption of natural gas has 
dropped by 22% in the period between August 2022 and March 2023, compared to the 
average  gas  consumption  over  the  same  period  in  the  preceding  5  years,  above  the 
15%  reduction  target.  Greece  could  keep  pursuing  efforts  to  temporarily  reduce  gas 
demand until 31 March 202426. 

(38) 

Introducing new financial instruments such as energy efficiency auctions could target 
the  coverage  of  existing  renovation  support  programmes  towards  energy-poor 
households  more  efficiently.  Greece’s  share  of  smart  meters  is  well  behind  the  EU 
average  (3%  compared  to  54%,  2021  figures)  and  could  be  increased  as  it  enables 
consumers to actively participate in the market and support demand-side response. In 
addition, specific sectors like transport and water have considerable scope for energy 
savings as they are still heavily reliant on oil. 

(39)  Labour  and  skills  shortages  in  sectors  and  occupations  key  for  the  green  transition, 
including  manufacturing,  deployment  and  maintenance  of  net-zero  technologies,  are 
creating  bottlenecks  in  the  transition  to  a  net-zero  economy.  High-quality  education 
and  training  systems  that  respond  to  changing  labour  market  needs  and  targeted 
upskilling and reskilling measures are key to reducing skills shortages and promoting 
labour inclusion and reallocation.  To unlock untapped labour supply, these  measures 
need  to  be  accessible,  in  particular  for  individuals  and  in  sectors  and  regions  most 
affected  by  the  green  transition.  In  Greece,  green  skills  shortages  are  currently  most 
evident in the construction sector, which is highly relevant for the green transition, and 
for  specific  occupations,  including  plumbers,  pipe  fitters  and  electricians.  Finally, 
there  remains  scope  for  further action to increase the  employability of  young people 
and  women.  Increasing  the  administrative  capacities  of  public  employment  services 
while  expanding  the  use  of  the  individualised  approach  on  jobseekers,  has  the 
potential  to  boost  employment  outcomes  for  these  groups  and  support  a  smooth  and 
fair transition. 

26 

Council Regulation (EU) 2022/1369  and Council Regulation (EU) 2023/706 

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(40) 

(41) 

In light of the Commission’s assessment, the Council has examined the 2023 Stability 
Programme and its opinion27 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 euro area Member States take action, including 
through  their  recovery  and  resilience  plans,  to  (i)  preserve  debt  sustainability  and 
refrain  from  broad-based  support  to  aggregate  demand  in  2023,  better  target  fiscal 
measures taken to mitigate the impact of high energy prices and reflect on appropriate 
ways to wind down support as energy price pressures diminish; (ii) sustain high public 
investment and promote private investment to support the green and digital transition; 
(iii)  support  wage  developments  that  mitigate  the  loss  in  purchasing  power  while 
limiting  second-round  effects  on  inflation,  further  improve  active  labour  market 
policies  and  address  skills  shortages;  (iv)  improve  the  business  environment  and 
ensure that energy support to companies is cost-effective, temporary, targeted to viable 
firms  and  that  it  maintains  incentives  for  the  green  transition;  and  (v)  preserve 
macro-financial  stability  and  monitor  risks  while  continuing  to  work  on  completing 
the  Banking  Union.  For  Greece,  recommendations  (1),  (2),  (3)  and  (4)  contribute  to 
the 
third,  fourth  and  fifth  euro  area 
recommendations.  

implementation  of 

the  first,  second, 

(42) 

In  light  of  the  Commission’s  in-depth  review  and  this  assessment,  the  Council  has 
examined  the  2023  National  Reform  Programme  and  the  2023  Stability  Programme. 
Its recommendations under Article 6 of Regulation (EU)  No 1176/2011  are reflected 
in recommendation (1) below. Policies referred to in recommendation (1) help address 
vulnerabilities linked to government debt, external position and non-performing loans. 
Recommendation (2) contributes to addressing recommendation (1). Policies referred 
to in recommendation (1) contribute to both addressing imbalances and implementing 
the recommendations for the euro area, in line with recital 41. 

HEREBY RECOMMENDS that Greece take action in 2023 and 2024 to: 

1. 

Wind  down  the  energy  support  measures  in  force  by  the  end  of  2023,  using  the 
related  savings  to  reduce  the  government  deficit.  Should  renewed  energy  price 
increases  necessitate  support  measures,  ensure  that  these  are  targeted  at  protecting 
vulnerable  households  and  firms,  fiscally  affordable,  and  preserve  incentives  for 
energy savings.  

Ensure  prudent  fiscal  policy,  in  particular  by  limiting  the  nominal  increase  in 
nationally financed net primary expenditure in 2024 to not more than 2.6%. 

Preserve nationally financed public investment and ensure the effective absorption of 
RRF  grants  and  other  EU  funds,  in  particular  to  foster  the  green  and  digital 
transitions.  

For  the  period  beyond  2024,  continue  to  pursue  a  medium-term  fiscal  strategy  of 
gradual  and  sustainable  consolidation,  combined  with  investments  and  reforms 
conducive  to  higher  sustainable  growth,  to  achieve  a  prudent  medium-term  fiscal 
position.  

27 

Under Articles 5(2) and 9(2) of Council Regulation (EC) No 1466/97. 

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2. 

3. 

4. 

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,  enlarge  the  tax  base,  including  by  reviewing  the  current  taxation 
structure for the self-employed, and strengthen tax compliance by extending the use 
of electronic payments. Preserve and increase the autonomy of the tax administration 
authority  by  extending  its  mandate  to  develop  and  manage  its  information  systems 
and  human  resources.  Safeguard  the  efficiency  of  public  administration  while 
ensuring  it  can  attract  the  right  skills  and  preserving  consistency  with  the  unified 
wage  grid.  Pursue  the  ongoing  reduction  of  non-performing  loans  and  further 
improve the functioning of the secondary non-performing loans market. 

Maintain the momentum in the steady implementation of the recovery and resilience 
plan and swiftly finalise the REPowerEU chapter with a view to rapidly starting its 
implementation.  Ensure  continued  sufficient  administrative  capacity  in  view  of  the 
size  of  the  plan.  Proceed  with  the  speedy  implementation  of  cohesion  policy 
programmes, in close complementarity and synergy with the recovery and resilience 
plan. 

To  ensure  adequate  and  equal  access  to  healthcare,  complete  the  roll-out  of  the 
primary healthcare framework and adopt stronger incentives for the enrolment of an 
adequate number of family doctors in order to achieve full population coverage and 
population  registration.  Finalise  cadastre  reform  by  completing  cadastral  mapping 
and the establishment and operation of the Hellenic Cadastre Agency. 

Reduce  reliance  on  fossil  fuels  and  further  accelerate  the  diversification  of  energy 
supply  routes.  Further  expand  the  deployment  of  renewable  energy  by  completing 
and  enforcing  the  new  legal  frameworks  for  the  licensing  process  and  for  offshore 
wind  farms,  increasing  electricity  network  and  storage  capacity,  promoting  the 
decentralised  production  of  renewable  energy,  and  putting  in  place  legislative 
frameworks for the production of renewable hydrogen and biomethane. Step up the 
delivery of measures that improve energy efficiency, including targeted measures for 
energy-poor households and the installation of smart meters, and policy efforts aimed 
at the provision and acquisition of the skills needed for the green transition. Support 
the  decarbonisation  of  the  transport  sector,  in  particular  by  promoting  electric 
vehicles.  

Done at Brussels, 

For the Council 
The President 

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