Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Greece
Date: 2024-06-19
Institutions: European Commission, Secretariat-General
Subjects: Greece, budget policy, economic policy, economic recovery, economic reform, employment policy, energy policy, investment policy, social policy, stability pact

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   EUROPEAN COMMISSION  Brussels, 19.6.2024  COM(2024) 608 final  Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Greece {SWD(2024) 600 final} - {SWD(2024) 608 final}  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the economic, social, employment, structural and budgetary policies 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 Regulation (EU) 2024/1263 of the European Parliament and of the Council 
of  29  April  2024  on  the  effective  coordination  of  economic  policies  and  on  multilateral 
budgetary surveillance and repealing Council Regulation (EC) No 1466/971, and in particular 
Article 3 (3) 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  investment,  entailing  a  fiscal  impulse 
financed by the EU. In line with the European Semester priorities, it helps achieve the 
economic  and  social  recovery  and  implement  sustainable  reforms  and  investment,  in 
particular  to  promote  the  green  and  digital  transitions  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.  

1 
2 
3 

OJ L 2024/1263, 30.04.2024. ELI: http://data.europa.eu/eli/reg/2024/1263/oj. 
OJ L 306, 23.11.2011, p. 25. ELI: http://data.europa.eu/eli/reg/2011/1176/oj. 
Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council  of  12  February  2021 
(OJ  L  57,  18.2.2021,  p.  17).  ELI: 
establishing 
http://data.europa.eu/eli/reg/2011/1176/oj. 

the  Recovery  and  Resilience  Facility 

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(2) 

(3) 

(4) 

(5) 

4 

5 
6 
7 
8 

The  REPowerEU  Regulation4,  adopted  on  27  February  2023,  aims  to  phase  out  the 
EU’s  dependency  on  Russian  fossil  fuel  imports.  This  would  help  achieve  energy 
security  and  diversify  the  EU’s  energy  supply,  while  increasing  the  uptake  of 
renewables,  energy  storage  capacities  and  energy  efficiency.  Greece  added  a  new 
REPowerEU chapter to its national recovery and resilience plan in order to finance key 
reforms and investments that will help achieve the REPowerEU objectives. 

On  16  March  2023,  the  Commission  issued  a  Communication  on  the  ‘Long-term 
competitiveness of the EU: looking beyond 2030’5, in order to inform policy decisions 
and  create  the  framework  conditions  for  increasing  growth.  The  Communication 
frames competitiveness along nine mutually reinforcing drivers. Among these drivers, 
access to private capital, research and innovation, education and skills, and the single 
market  emerge  as  paramount  policy  priorities  for  reform  and  investment  to  address 
current productivity challenges as well as to build up the long-term competitiveness of 
the EU and its Member States.  On 14 February  2024, the Commission  followed this 
Communication  with  the  Annual  Single  Market  and  Competitiveness  Report6.  The 
report  details  the  competitive  strengths  and  challenges  of  Europe's  Single  Market, 
tracking yearly developments according to the nine competitiveness drivers identified. 

On 21 November 2023, the Commission adopted the 2024 Annual Sustainable Growth 
Survey7, marking the start of the 2024 cycle of the European Semester for economic 
policy  coordination.  The  European  Council  endorsed  the  priorities  of  the  survey 
around  the  four  dimensions  of  competitive  sustainability  on  22  March  2024.  On  21 
November 2023, on the basis of Regulation (EU) No 1176/2011, the Commission also 
adopted the 2024 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 the 2024 draft budgetary plan of Greece. The Commission 
also adopted a recommendation for a Council recommendation on the economic policy 
of the euro area, which the Council adopted on 12 April 2024, as well as the proposal 
for  the  2024  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 11 March 2024.  

On  30  April  2024,  the  EU’s  new  economic  governance  framework  came  into  force. 
The  framework  includes  the  new  Regulation  of  the  European  Parliament  and  of  the 
Council  (EU)  2024/1263  on  the  effective  coordination  of  economic  policies  and 
multilateral  budgetary  surveillance  and  repealing  Council  Regulation  (EC)  No 
1466/97.  It  also  includes  the  amended  Regulation  (EC)  No  1467/97  on  the 
implementation  of  the  excessive  deficit  procedure  and  the  amended  Directive 
2011/85/EU  on  the  budgetary  frameworks  of  Member  States8.  The  objectives  of  the 

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). ELI: http://data.europa.eu/eli/reg/2023/435/oj. 
COM(2023) 168 final. 
COM(2024) 77 final. 
COM(2023) 901 final. 
Council  Regulation  (EU)  2024/1264  of  29  April  2024  amending  Regulation  (EC)  No  1467/97  on 
speeding  up  and  clarifying  the  implementation  of  the  excessive  deficit  procedure  (OJ  L,  2024/1264, 
30.4.2024,  ELI:  http://data.europa.eu/eli/reg/2024/1264/oj)  and  Council  Directive  (EU)  2024/1265  of 

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new  framework  are  public  debt  sustainability  and  sustainable  and  inclusive  growth 
through gradual  fiscal consolidation  as  well as reforms  and investments.  It  promotes 
national  ownership  and  has  a  greater  medium-term  focus,  combined  with  more 
effective and coherent enforcement. Each Member State should submit to the Council 
and  to  the  Commission  a  national  medium-term  fiscal-structural  plan.  National 
medium-term  fiscal-structural  plans  contain  the  fiscal,  reform  and  investment 
commitments  of  a  Member  State,  covering  a  planning  horizon  of  4  years  or  5  years 
depending on the regular length of the national legislature. The net expenditure9 path 
in  the  national  medium-term  fiscal-structural  plans  should  comply  with  the 
requirements of Regulation (EU) 2024/1263, including the requirements to put or keep 
general government debt on a plausibly downward path by the end of the adjustment 
period  at  the  latest,  or  for  it  to  remain  at  prudent  levels  below  60%  of  GDP,  and  to 
bring  and/or  maintain  the  government  deficit  below  the  3%  of  GDP  reference  value 
over  the  medium  term.  Where  a  Member  State  commits  to  a  relevant  set  of  reforms 
and investments in accordance with the criteria set out in Regulation (EU) 2024/1263, 
the  adjustment  period  may  be  extended  by  3  years  at  most.  For  the  purpose  of 
supporting the preparation of those plans, on [21 June] 2024, the Commission is set to 
provide Member States with guidance on the content of the plans and the subsequent 
annual progress reports that they will need to submit and, in accordance with Article 5 
of Regulation (EU) 2024/1263, will transmit to them technical guidance on the fiscal 
adjustments  (reference  trajectories  and  technical  information  where  applicable). 
Member  States  should  submit  their  medium-term  fiscal-structural  plans  by  20 
September  2024,  unless  the  Member  State  and  the  Commission  agree  to  extend  the 
deadline by a reasonable period of time. Member States should ensure the involvement 
of their national parliaments, and the consultation of independent fiscal institutions, of 
social partners and other national stakeholders, as appropriate. 

In 2024, the European Semester for economic policy coordination continues to evolve 
in  line  with  the  implementation  of  the  Recovery  and  Resilience  Facility.  The  full 
implementation  of  the  recovery  and  resilience  plans  remains  essential  for  delivering 
the policy priorities under the European Semester, as the plans help effectively address 
all  or  a  significant  subset  of  challenges  identified  in  the  relevant  country-specific 
recommendations  issued  in  recent  years.  The  2019,  2020,  2022  and  2023  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.  

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, 
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 

29  April  2024  amending  Directive  2011/85/EU  on  requirements  for  budgetary  frameworks  of  the 
Member States (OJ L, 2024/1265, 30.4.2024, ELI: http://data.europa.eu/eli/dir/2024/1265/oj). 
Net expenditure as defined in Article 2 of Council Regulation (EU) 2024/1263 of 29 April 2024 (OJ L 
2024/1263,  30.4.2024.  ELI:  http://data.europa.eu/eli/reg/2024/1263/oj).  Net  expenditure  means 
government  expenditure  net  of  (i)  interest  expenditure,  (ii)  discretionary  revenue  measures,  (iii) 
expenditure  on  programmes  of  the  Union  fully  matched  by  Union  funds  revenue,  (iv)  national 
expenditure  on  co-financing  of  programmes  funded  by  the  Union,  (v)  cyclical  elements  of 
unemployment benefit expenditure, and (vi) one-offs and other temporary measures. 

(6) 

(7) 

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(8) 

(9) 

recovery and resilience  plan for  Greece10, which  was  amended on  8  December 2023 
following Article 18(2) of Regulation (EU) 2021/241 to update the maximum financial 
contribution for non-repayable financial support, as well as to include the REPowerEU 
chapter11. 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. 

On  30  April  2024,  Greece  submitted  its  2024  National  Reform  Programme  and  its 
2024 Stability Programme, in line with Article 4(1) of Regulation (EC) No 1466/97. In 
accordance with  Article  27 of Regulation  (EU) 2021/241,  the  2024 National  Reform 
Programme  also  reflects  Greece’s  biannual  reporting  on  the  progress  made  in 
achieving its recovery and resilience plan.  
The Commission published the 2024 country report for Greece12 on 19 June 2024. It 
assessed  Greece’s  progress 
country-specific 
recommendations  adopted by the Council  between 2019  and  2023 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.  

addressing 

relevant 

the 

in 

(10)  The  Commission  carried  out  an  in-depth  review  under  Article  5  of  Regulation  (EU) 
No 1176/2011 for Greece. The main findings of the Commission’s staff assessment of 
macroeconomic  vulnerabilities  for  Greece  for  the  purposes  of  that  Regulation  were 
published in April 202413. On 19 June 2024, the Commission concluded that Greece is 
experiencing  macroeconomic  imbalances  after  being  identified  with  excessive 
imbalances  in  2023.  In  particular,  Greece  faces  vulnerabilities  related  to  high 
government debt and high non-performing loans in the context of high unemployment, 
which remain relevant but have receded markedly and are expected to recede further, 
but  the  external  position  remains  weak.  The  government  debt-to-GDP  ratio  has 
continued to decline, and while it remains high at almost 162% in 2023, the short-term 
risks to debt sustainability appear low. Nominal GDP growth was a major driver of the 
rapidly  falling  debt  ratio  in  recent  years,  but  the  expected  further  improvement  in 
fiscal balances is set to ensure that it continues to decline. The current account deficit, 
which had widened markedly over the years 2020 to 2022, narrowed significantly in 
2023,  but  remains  elevated  against  a  backdrop  of  buoyant  domestic  demand.  Only 
marginal improvements of the current account are expected this year and next, as the 
robust growth in investment is forecast to keep imports elevated. The deeply negative 
net  international  investment  position (NIIP)-to-GDP  ratio also  improved  last year on 

10 

11 

12 
13 

Council Implementing Decision of 13 July 2021 on the approval of the assessment of the recovery and 
resilience plan for Greece (ST10152/2021). 
Council Implementing Decision of 8 December 2023 amending the Implementing Decision of 13 July 
2021  on  the  approval  of  the  assessment  of 
the  recovery  and  resilience  plan  for  Greece 
(ST15831/1/2023). 
SWD(2024) 608 final. 
SWD(2024) 102 final. 

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the back of the high nominal GDP growth, but it remains the weakest in the EU. Non-
performing  loans  have  shown  a  strong  reduction  in  recent  years  and  continued  to 
decline in 2023, but the workout of the  non-performing loans outside of the banking 
sector  remains  slow,  and  as  a  result  they  continue  to  weigh  on  the  economy. 
Employment increased and unemployment declined further but is still relatively high. 
Years of sustained policy action and extensive structural reforms have clearly favoured 
a reduction of the identified vulnerabilities. Maintaining the prudent fiscal stance and 
continued 
improve 
competitiveness and ensure the rebalancing of the economy, including on the external 
position.   

implementation  of 

remain  crucial 

the  RRP 

timely 

to 

(11)  Based on data validated by Eurostat14, Greece’s general government deficit decreased 
from 2.5% of GDP in 2022 to 1.6% in 2023, while the general government debt fell 
from 172.7% of GDP at the end of 2022 to 161.9% at the end of 2023.  

(12)  On  12  July  2022,  the  Council  recommended15 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 growth16, 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  was 
recommended  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.  In 2023, 
according to the Commission estimates, the fiscal stance17 was expansionary, by 0.5% 
of  GDP,  in  a  context  of  high  inflation.  The  growth  in  nationally  financed  primary 
current  expenditure  (net  of  discretionary  revenue  measures)  in  2023  provided  a 
contractionary contribution to the fiscal stance of 0.6% of GDP and was in line with 
the  Council  recommendation.  The  contractionary  contribution  of  nationally  financed 
primary  current  expenditure  was  due  to  the  reduced  costs  of  the  emergency  support 
measures  (targeted  and  untargeted)  to  households  and  firms  in  response  to  energy 
price  hikes  (by  2.7%  of  GDP).  The  main  drivers  of  growth  in  nationally  financed 
primary  current  expenditure  (net  of  discretionary  revenue  measures)  were  social 
transfers,  including  pensions.  Expenditure  financed  by  Recovery  and  Resilience 
Facility  grants  and  other  EU  funds  amounted  to  2.5%  of  GDP  in  2023.  Nationally 
financed  investment  amounted  to  2.6%  of  GDP  in  2023,  representing  an  increase  of 
0.2  percentage  points  as  compared  to  2022.  Greece  financed  additional  investment 
through the Recovery and Resilience Facility and other EU funds. It  financed public 
investment  for  the  green  and  digital  transitions,  and  for  energy  security,  such  as 

14 
15 

16 

17 

Eurostat-Euro Indicators, 22.4.2024. 
Council  Recommendation  of  12  July  2022  on  the  2022  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 Spring 2024 Forecast, the medium-term potential output growth of Greece in 
2023 is estimated at 4.5% in nominal terms, based on the 10-year average real potential growth rate and 
the 2023 GDP deflator. 
The fiscal stance is defined as a measure of the annual change in the underlying budgetary position of 
the  general  government.  It  aims  to  assess  the  economic  impulse  stemming  from  fiscal  policies,  both 
those  that  are  nationally  financed  and  those  that  are  financed  by  the  EU  budget.  The  fiscal  stance  is 
measured as the difference between (i) the medium-term potential growth and (ii) the change in primary 
expenditure  net  of  discretionary  revenue  measures  (and  excluding  temporary  emergency  measures 
related to the COVID-19 crisis) and including expenditure financed by non-repayable support (grants) 
from the Recovery and Resilience Facility and other Union funds. 

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supporting the deployment of new renewables to the electricity grid that is facilitated 
through the upgrading of transmission infrastructure and providing financial assistance 
to SMEs to adopt digital solutions, which are funded by the Recovery and Resilience 
Facility and other EU funds. 

(13)  The key projections in the 2024 Stability Programme can be summarised as follows. 
The  macroeconomic  scenario  underpinning  the  budgetary  projections  forecasts  real 
GDP to grow by 2.5% in 2024 and 2.6% in 2025, while it expects HICP inflation at 
2.6%  in  2024  and  2.0%  in  2025.  The  general  government  deficit  is  expected  to 
decrease  to  1.2%  of  GDP  in  2024  and  0.9%  of  GDP  in  2025,  while  the  general 
government  debt-to-GDP  ratio  is  set  to  decrease  to  152.7%  by  the  end  of  2024  and 
146.3%  by  the  end  of  2025.  The  Stability  Programme  does  not  include  budgetary 
projections beyond 2025. 

(14)  The  Commission  Spring  2024  Forecast  projects  real  GDP  to  grow  by  2.2%  in  2024 
and 2.3% in 2025, and HICP inflation to stand at 2.8% in 2024 and 2.1% in 2025. 

(15)  The Commission Spring 2024 Forecast projects a general government deficit of 1.2% 
of  GDP  in  2024,  while  the  general  government  debt-to-GDP  ratio  is  forecast  to 
decrease  to  153.9%  by  the  end  of  2024.  The  decrease  of  the  deficit  in  2024  mainly 
reflects the muted growth of social benefits compared to revenue growth. Based on the 
Commission’s estimates, the fiscal stance is projected to be expansionary, by 0.3% of 
GDP, in 2024. 

(16)  Expenditure  amounting  to  1.5%  of  GDP  will  be  financed  by  non-repayable  support 
(“grants”)  from  the  Recovery  and  Resilience  Facility  in  2024,  compared  to  1.0%  of 
GDP  in  2023,  according  to  the  Commission  Spring  2024  Forecast.  Expenditure 
financed  by  Recovery  and  Resilience  Facility  grants  will  enable  high-quality 
investment and productivity-enhancing reforms without a direct impact on the general 
government balance and debt of Greece. Expenditure amounting to less than 0.1% of 
GDP is expected to be backed by loans from the Recovery and Resilience Facility, in 
both 2023 and 2024, according to the Commission Spring 2024 Forecast. 

(17)  On  14  July  2023,  the  Council  recommended18  that  Greece  ensure  a  prudent  fiscal 
policy,  in  particular  by  limiting  the  nominal  increase  in  net  nationally  financed 
primary  expenditure19  in  2024  to  not  more  than  2.6%.  When  executing  their  2023 
budgets  and  preparing  their  Draft  Budgetary  Plans  for  2024,  Member  States  were 
invited  to  take  into  account  that  the  Commission  would  propose  to  the  Council  the 
opening of the deficit-based excessive deficit procedures based on the outturn data for 
2023.  According  to  the  Commission  Spring  2024  Forecast,  Greece’s  net  nationally 
financed  primary  expenditure  is  projected  to  increase  by  1.8%  in  202420,  which  is 

18 

19 

20 

Council  Recommendation  of  14  July  2023  on  the  2023  National  Reform  Programme  of  Greece  and 
delivering a Council opinion on the 2023 Stability Programme of Greece, OJ C 312, 1.9.2023, p. 67. 
Net primary expenditure is defined as nationally financed expenditure net of  (i) discretionary revenue 
measures, (ii) interest expenditure, (iii) cyclical unemployment expenditure, and (iv) and one-offs and 
other temporary measures. 
This takes into account 0.1% of GDP one-off measures in 2024, relating to expenditures on mitigating 
the impact of natural disasters (as well as 0.2% of GDP in 2023, relating also to expenditures following 
the natural disasters). On 14 July 2023, the Council also referred to the devastating floods that hit Italy 
in  May  2023  and  agreed  that  the  cost  of  direct  emergency  support  related  to  those  floods  would  be 
taken into account in subsequent assessments of compliance and would, in principle, be considered as 
one-off  and  temporary  measures.  A  similar  approach  has  been  followed  with  regard  to  the  floods  in 
Greece. 

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below  the  recommended  maximum  growth  rate.  This  is  in  line  with  what  was 
recommended by the Council.  

(18)  Moreover,  the  Council  recommended  that  Greece  take  action  to  wind  down  the 
emergency energy support measures in  force, using the related savings to  reduce the 
government  deficit,  as  soon  as  possible  in  2023  and  2024.  The  Council  further 
specified  that,  should  renewed  energy  price  increases  necessitate  new  or  continued 
support  measures,  Greece  should  ensure  that  these  were  targeted  at  protecting 
vulnerable  households  and  firms,  fiscally  affordable,  and  preserve  incentives  for 
energy savings. According to the Commission Spring 2024 Forecast, the net budgetary 
cost21 of emergency energy support measures is estimated at 0.0% of GDP in 2023 and 
projected  at  0.1%  in  2024,  and  0.1%  in  2025.  In  particular,  increased  heating 
allowance and the return of special levy on diesel to farmers are assumed to remain in 
force in 2024 and 2025, albeit with a minor impact22. The emergency energy support 
measures are projected to be wound down as soon as possible in 2023 and 2024. This 
is in line with what was recommended by the Council. 

(19) 

In  addition,  the  Council  also  recommended  that  Greece  preserve  nationally  financed 
public  investment  and  ensure  the  effective  absorption  of  Recovery  and  Resilience 
Facility  grants  and  other  EU  funds,  in  particular  to  foster  the  green  and  digital 
transitions.  According  to  the  Commission  Spring  2024  Forecast,  nationally  financed 
public investment is projected to decrease to 2.4% of GDP in 2024, from 2.6% of GDP 
in  2023.  This  is  due  to  the  timing  of  the  programming  periods  of  the  EU  structural 
funds.  In  particular,  the  EU  co-financing  rate  of  the  investments  under  the  new 
programme  is  assumed  to  be  higher  than  that  of  the  investments  under  the  previous 
programming period. This leads to a decline in the co-financed national expenditure on 
investments.  The  fiscal  adjustment  in  2024  is  not  primarily  due  to  the  decrease  in 
investments. Taking into account these additional factors, public investment in 2024 is 
assessed  as  respecting  the  Council  recommendation.  In  turn,  public  expenditure 
financed  from  revenues  from  EU  funds,  including  Recovery  and  Resilience  Facility 
grants, is expected to increase to 3.4% of GDP in 2024 from 2.5% of GDP in 2023. 

(20)  Based on policy measures known at the cut-off date of the forecast and on a no-policy-
change  assumption,  the  Commission  Spring  2024  Forecast  projects  a  government 
deficit of 0.8% of GDP in 2025. The decrease of the deficit in 2025 mainly reflects the 
decline of interest expenditure and muted growth of the public wage bill. The general 
government  debt-to-GDP ratio is  set  to  decrease to  149.3% by the end of 2025.  The 
decrease  of  the  debt-to-GDP  ratio  in  2025  mainly  reflects  an  increasing  primary 
surplus  and  nominal  GDP  growth,  as  well  as  stock-flow  adjustments.  Prudent  fiscal 
policy should contribute to strengthening the external position too. 

(21)  Building  on  best  practices  and  reforms  carried  out  as  part  of  the  recovery  and 
resilience plan, including a new reform aiming to further strengthen Greece's efforts to 
combat  tax  evasion,  there  remains  scope  to  further  strengthen  the  tax  policy 
framework  to  enable  Greece  to  attract  more  investments,  thereby  reducing  the 
investment  gap,  which  remains  significant.  In  particular,  the  introduction  of  a  wider 
advance  tax-ruling  system  in  line  with  EU  best  practices,  could  give  taxpayers  a 

21 

22 

The figure represents the level of the annual budgetary cost of those measures, including revenue and 
expenditure and, where applicable, net of the revenue from taxes on windfall profits of energy suppliers 
Measures that, according to Greece, remain in place until the end of 2024 are, in principle, assumed in 
the Commission Spring 2024 Forecast as having a budgetary impact also in 2025. 

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transparent interpretation of existing tax law, thereby providing investors with greater 
legal certainty. Furthermore, stepping up efforts to expand the Independent Authority 
for Public Revenue’s capacity, in particular by strengthening its autonomy to manage 
and develop its human resources, could help further increase tax compliance. 

(22)  Greece  has  continued  to  take  steps  to  modernise  its  public  administration,  but  there 
remains  scope  to  further  increase  its  efficiency.  Following  a  significant  adjustment 
after 2010, the size and cost of its public administration has been broadly aligned with 
the EU average. Greece's public sector wage bill remained stable in 2023 at 10.8% of 
GDP, slightly above the EU average (10.2 % of GDP), taking into account the wage 
increases that took place for the first time since 2010. The adjustment of allowances, 
including for positions of managerial responsibility, that came into effect at the start of 
2024  were  consistent  with  the  unified  wage  grid,  as  they  were  applied  across  the 
public  administration.  To  safeguard  those  gains  in  future,  it  is  key  to:  (i) ensure 
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 (ii) maintain the ceiling for temporary staff that was introduced in 
2022. The recovery and resilience plan contains measures to improve the effectiveness 
of  public  administration,  including  the  establishment  of  a  multi-level  governance 
framework that was adopted in 2023. For the expected improvements in coordination 
between the central, regional and local levels to materialise, the framework, including 
the  envisaged  governance  structures  and  information  system,  is  expected  to  become 
fully operational during 2024. 

(23) 

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. These are expected 
to  help  effectively  address  all  or  a  significant  subset  of  challenges  identified  in  the 
relevant  country-specific  recommendations.  Within  this  tight  timeframe,  proceeding 
swiftly  with  the  effective  implementation  of  the  plan  including  the  REPowerEU 
chapter is essential to boost Greece’s long-term competitiveness through the green and 
digital transition, while ensuring social fairness. To deliver on the commitments of the 
plan  by  August  2026,  it  is  essential  for  Greece  to  continue  the  implementation  of 
reforms  and  to  accelerate  investments  by  addressing  risks  of  delays  while  ensuring 
strong  administrative  capacity.  The  Greek  authorities  have  adopted  measures  to 
improve the implementation and boost administrative capacity, while the recovery and 
resilience plan contains further specific measures that are expected to help achieve that 
objective.  Specific  challenges  for  Greece  include:  (i)  lengthy  litigation  processes  to 
address  legal  claims  against  public  procurement  procedures  risking  delays  in  the 
planned  completion  date  of  investments  beyond  August  2026;  (ii) slow  transfer  of 
property rights; and (iii) weak coordination, particularly evident as regards investment 
and  reforms  covering  policy  areas  stretching  beyond  the  remit  of  a  single  Ministry. 
The  systematic  involvement  of  local  and  regional  authorities,  social  partners,  civil 
society  and  other  relevant  stakeholders  remains  essential  to  ensure  broad  ownership 
for the successful implementation of the recovery and resilience plan.  

(24)  As  part  of  the  mid-term  review  of  the  cohesion  policy  funds,  in  accordance  with 
Article  18  of  Regulation  (EU)  2021/1060,  Greece  is  required  to  review  each 
programme  by  March  2025,  taking  into  account,  among  other  things,  the  challenges 
identified in the 2024 country-specific recommendations, as well as its national energy 
and climate plan. This  review  forms the basis for the definitive allocation of the EU 
funding  included  in  each  programme.  Greece  has  made  progress  in  implementing 

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cohesion  policy  and  the  European  Pillar  of  Social  Rights,  but  challenges  remain.  In 
particular,  Greece  continues  to  register  slow  growth  in  more  peripheral  regions  and 
significant  disparities  between  urban  and  non-urban  areas.  Accelerating 
the 
implementation  of  cohesion  policy  programmes  coupled  with  the  strengthening  of 
administrative capacity at national and regional level is crucial. The priorities agreed 
in the programme continue to be relevant. In particular, actions improving the capacity 
of companies to innovate and focusing on targeted business support are both essential 
to  boost  competitiveness.  As  part  of  the  green  transition,  investment  in  waste 
management is needed to attain recycling targets and reduce landfilling. It is essential 
to  improve  water  management  in  a  comprehensive  manner,  encompassing  water  and 
wastewater  management,  energy  recovery,  digitalisation,  water  reuse,  rainwater  and 
sustainable  desalination  based  on  renewable  energy  sources.  The  energy  transition 
requires  a  greater  share  of  renewable  energy,  storage  solutions  and  increased  energy 
efficiency, as well as addressing energy poverty. Increasing  the share of  clean urban 
transport  is  also  key  to  achieving  carbon  neutrality.  Cohesion  policy  programmes 
should continue to  invest  in  skills, based on a comprehensive strategy, to implement 
the  Child  Guarantee,  to  promote  quality  and  affordable  long-term  care  services  and 
social  housing  and  to  enhance  the  labour  market  activation  and  social  integration  of 
marginalised  communities,  such  as  Roma  and  people  with  a  migrant  background.  In 
the context of the mid-term review of cohesion policy programmes, the prevention and 
preparedness  against  climate  change-related  risks  merits  further  attention.  Greece 
could  also  leverage  the  Strategic  Technologies  for  Europe  Platform  initiative  to 
support  its  industrial  transformation,  notably  clean  energy  production  and  storage, 
green shipping and biotechnology, and the development of green and digital skills.  

increasing, 

the  country’s  competitiveness.  Albeit 

(25)  Beyond the economic and social challenges addressed by the recovery and resilience 
plan  and  other  EU  funds,  Greece  faces  several  additional  challenges  related  to 
economic growth, the regulatory framework and upskilling of the workforce, which, if 
addressed,  could  boost 
the 
employment  rate  is  among  the  lowest  in  the  EU  and  access  to  the  labour  market 
remains  challenging  especially  for  women  and  the  youth.  On  education,  Greece  has 
taken  steps  over  recent  years  to  revise  curricula,  including  in  the  context  of  the 
recovery and resilience plan, and integrate some courses on soft and digital skills into 
them.  However,  performance  in  basic  skills  remains  particularly  low,  undermining 
labour  market  outcomes,  productivity  and  competitiveness.  This  is  demonstrated  by 
the  performance  of  15-year-old  students  in  mathematics,  reading  and  science,  which 
has  been  deteriorating  sharply  since  2012  and  is  amongst  the  lowest  in  the  EU, 
according  to  the  latest  OECD  Programme  for  International  Student  Assessment.  The 
high  and  increasing  share  of  underperforming  students,  including  among  those  who 
come  from  more  advantaged  backgrounds,  and  the  low  share  of  top  performing 
students point to structural challenges regarding the quality and equity of the education 
system.  Greece also  ranks  last  among EU member states  in  terms of  participation  in 
early  childhood  education  and  care,  which  has  been  found  to  positively  affect 
subsequent  education  outcomes.  The  challenges  undermining  Greece's  education 
outcomes  can  be 
the  education  system; 
(ii) insufficient  emphasis  put  on  competence-based  teaching  and  learning  methods 
with  a  strong  focus  on  entrepreneurial,  soft  and  transversal  skills;  (iii)  low  levels  of 
school autonomy; and (iv) lack of systematic teacher evaluation. 

to:  (i) the  underfunding  of 

linked 

(26) 

Improving  services  to  the  public  and  increasing  economic,  fiscal  and  climate 
sustainability  remain  important  priorities.  In  this  context,  there  is  scope  to  further 
improve  the  management  of  state  assets,  including  through  modernising  state-owned 

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enterprises  (SOEs) and  developing  public real  estate.  In certain  SOEs,  some reforms 
were  successfully  implemented,  which  helped  increase  operational  flexibility  and 
commercial  autonomy,  strengthen  their  internal  management  capacities  and  improve 
their  procurement,  remuneration  and  hiring  policies  and  processes.  Replicating  such 
practices would be beneficial for other SOEs to deliver increased value for society and 
the  economy  alike.  The  Hellenic  Corporation  of  Assets  and  Participations  and  its 
subsidiaries play a central role in managing such state assets. There are reflections on 
how  to  further  improve  the  Corporation’s  efficiency  and  effectiveness,  such  as  by 
increasing  its  organisational  and  functional  capacity,  and  by  strengthening  its 
operational autonomy and in-house investment expertise. 

(27)  Slow environmental licensing due to, among other things, regulatory gaps, continues 
to  impede  investment  at  central  and  regional  level.  Environmental  licensing  is  an 
integral part of the overall licensing process for any type of investment and the process 
for obtaining  an environmental  permit  is  complex  and lengthy.  In particular, there is 
still no environmental classification for renewables or conditions that determine under 
which circumstances  industrial  activities with  a limited environmental impact  can be 
licensed. The criteria for cases that require a simplified permitting process due to non-
substantial changes also  need to be set out.  The lack of regulatory acts to help solve 
these  issues  prevents  legislative  improvements  previously  introduced  to  base 
environmental  licensing  on  more  rational  and  risk-based  criteria  from  having  any 
impact. Adopting these pending regulatory acts  could make a material impact on the 
time  and  quality  of  environmental  assessments  both  for  new  or  amended/renewed 
permits  for  the  concerned  investments.  Furthermore,  despite  the  completion  of  the 
regulatory  framework  to  deploy  environmental  assessors  from  the  private  sector,  the 
relevant registry remains unexploited and the system has not yet been set in operation. 
Completing  the  regulatory  framework  by  adopting  the  missing  secondary  legislation 
and  operationalising  the  system  of  certified  private  environmental  assessors  would 
help  strengthen  Greece’s  business  environment,  as  these  are  expected  to  reduce 
bottlenecks in the environmental licensing process and boost investor confidence. The 
above-mentioned  policy  actions  are  expected  to  facilitate  investments,  which  are 
expected  to  increase  productivity  and  widen  the  export  base,  thereby  reduce  import 
dependence, improve the growth outlook and support the external rebalancing as well 
as the unwinding of stock imbalances. 

(28)  Despite the efforts made, particularly through expanding the share of renewables of its 
overall  electricity  production,  Greece  remains  highly  dependent  on  fossil  fuels,  with 
oil and gas making up 55% and 20%, respectively, of its energy mix in 2022. While 
the  REPowerEU  chapter  added  to  Greece’s  revised  recovery  and  resilience  plan 
contains  several  reforms  and  investments  that  are  expected  to  accelerate  Greece’s 
decarbonisation  efforts,  further  actions  are  still  warranted  to  reduce  Greece’s  fossil 
fuel  dependency.  Greece  has  one  of  the  EU’s  oldest  vehicle  fleets  and  the  use  of 
renewables in  transportation remains very low. As a result, Greece’s transport sector 
remains one of the largest emitters of carbon dioxide. To accelerate the electrification 
of the transport sector, a more ambitious policy could set the tone. This could include 
expanding  the  categories  of  vehicles  required  under  the  national  Climate  Law  to 
switch  from  combustion  engines  to  electric  motors  and  enforcing  the  withdrawal  of 
heavily polluting vehicles.  

(29)  The rising frequency and severity of natural disasters affecting Greece has put a heavy 
strain  on  the  civil  protection  system.  In  2023,  Greece  fell  victim  to  severe  wildfires 
and  floods,  which  caused  human  fatalities,  catastrophic  harm  to  the  natural 

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environment and extensive damage to property and infrastructure. Investments in civil 
protection under the recovery and resilience plan and the cohesion funds are expected 
to boost disaster response capacities. However, there is room for further strengthening 
prevention  efforts.  Reforms  and  investments  to  improve  the  effectiveness  and 
efficiency of early warning, climate-proofing  infrastructure and other risk prevention 
measures  could  complement  preparedness  measures  and  help  reduce  the  damage 
caused by future natural disasters. Furthermore, the scope of investments could focus 
on actions that build up resilience by addressing prevention and preparedness as well 
as through using ecosystem-based approaches. 

In view of the close interlinkages between the economies of euro area Member States 
and of their collective contribution to the functioning of the Economic and Monetary 
Union,  in  2024  the  Council  recommended  that  the  euro  area  Member  States  take 
action,  including  through  their  recovery  and  resilience  plans,  to  implement  the 
recommendation  on 
the  euro  area.  For  Greece, 
recommendations  (1),  (2)  and  (3)  help  implement  the  first,  second,  third,  fourth  and 
fifth euro area recommendations. 

the  economic  policy  of 

In  light  of  the  Commission’s  in-depth  review  and  its  conclusion  on  the  existence  of 
imbalances,  recommendations under Article 6 of Regulation  (EU) No 1176/2011  are 
reflected  in  recommendations  (1),  (2)  and  (3)  below.  Policies  referred  to  in 
recommendation  (1)  help  to  address  vulnerabilities  linked  to  government  debt,  the 
external  position  and  non-performing  loans.  Policies  referred  to  in  recommendations 
(2) and (3) support potential GDP growth, and as a result also contribute to addressing 
recommendation (1). Recommendations (1), (2) and (3) contribute to both addressing 
imbalances  and  implementing  the  Recommendation  for  the  euro  area,  in  line  with 
recital 30. 

(30) 

(31) 

HEREBY RECOMMENDS that Greece take action in 2024 and 2025 to:  

1. 

Submit  the  medium-term  fiscal-structural  plan  in  a  timely  manner.  In  line  with  the 
requirements  of  the  reformed  Stability  and  Growth  Pact,  limit  the  growth  in  net 
expenditure23 in 2025 to a rate consistent with putting the general government  debt 
on  a  plausibly  downward  trajectory  over  the  medium  term  and  maintaining  the 
general government deficit below the 3% of GDP Treaty reference value. Continue 
improving the investment friendliness of the taxation system by reinforcing its legal 
certainty  and  continue  increasing  the  operational  autonomy  of  the  tax  authority  to 
manage  and  develop  its  human  resources.  Safeguard  the  efficiency  of  public 
administration  while  ensuring  that  it  can  attract  the  right  skills  and  preserving 
consistency  with  the  unified  wage  grid,  and  operationalising  the  multi-level 
governance  framework.  Ensure  that  external  balances  continue  on  a  steadily 
improving  path  by  promoting  balanced  growth  and  supporting  productive  domestic 
investment. Pursue the ongoing reduction of the stock of non-performing loans held 
by banks and credit servicers, including by further improving the e-auction processes 
to reduce the ratio of unsuccessful auctions. 

23 

According  to  Article  2(2)  of  Regulation  (EU)  2024/1263,  ‘net  expenditure’  means  government 
expenditure net of interest expenditure, discretionary revenue measures, expenditure on programmes of 
the  Union  fully  matched  by  revenue  from  Union  funds,  national  expenditure  on  co-financing  of 
programmes funded by the Union, cyclical elements of unemployment benefit expenditure, and one-offs 
and other temporary measures. 

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2. 

3. 

4. 

Strengthen administrative capacity to manage EU funds, accelerate investments and 
maintain momentum in the implementation of reforms.  Address emerging delays to 
allow  for  continued,  swift  and  effective  implementation  of  the  recovery  and 
resilience  plan,  including  the  REPowerEU  chapter,  ensuring  completion  of  reforms 
and investments by August 2026. Accelerate the implementation of cohesion policy 
programmes.  In  the  context  of  their  mid-term  review,  continue  focusing  on  the 
agreed priorities, taking action to better address the needs in the  area of prevention 
and  preparedness  against  climate  change-related  risks,  while  considering  the 
opportunities  provided by  the Strategic Technologies for Europe Platform initiative 
to improve competitiveness. 

Boost competitiveness through tackling underachievement in basic skills, reinforcing 
the  management  of  state  assets  and  completing  the  regulatory  framework  for 
environmental licensing. 

Reduce  reliance  on  fossil  fuels  by  accelerating  the  decarbonisation  of  the  transport 
sector.  Strengthen  management  of  natural  disasters  by  putting  in  place  an  effective 
early warning and risk prevention system. 

Done at Brussels, 

For the Council 
The President 

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