Recommendation for a COUNCIL RECOMMENDATION endorsing the national medium-term fiscal-structural plan of Greece
Date: 2024-11-26
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: Greece, budget deficit, coordination of EMU policies, economic reform, fiscal policy, investment, macroeconomics, national planning, public debt, structural adjustment

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   EUROPEAN COMMISSION  Strasbourg, 26.11.2024  COM(2024) 714 final  Recommendation for a COUNCIL RECOMMENDATION endorsing the national medium-term fiscal-structural plan of Greece  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

endorsing the national medium-term fiscal-structural plan of Greece 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 121 thereof, 

Having regard to Regulation (EU) 2024/1263, and in particular Article 17 thereof, 

Having regard to the recommendation from the Commission, 

Whereas: 

GENERAL CONSIDERATIONS 

(1) 

(2) 

1 

2 

3 

4 

A reformed EU economic governance framework entered into force on 30 April 2024. 
Regulation  (EU)  2024/1263  of  the  European  Parliament  and  of  the  Council  on  the 
effective  coordination  of  economic  policies  and  on  multilateral  budgetary 
surveillance1,  together  with  the  amended  Regulation  (EC)  No  1467/97  on  the 
implementation  of  the  excessive  deficit  procedure2,  and  the  amended  Council 
Directive  2011/85/EU  on  the  budgetary  frameworks  of  Member  States3  are  the  core 
elements of the reformed EU economic governance framework. The framework aims 
at  ensuring  public  debt  sustainability  and  sustainable  and  inclusive  growth  through 
reforms  and  investments.  It  promotes  national  ownership  and  has  a  medium-term 
focus, combined with an effective and coherent enforcement of the rules.  

The  national  medium-term  fiscal-structural  plans  that  Member  States  submit  to  the 
Council  and  to  the  Commission  are  at  the  centre  of  the  new  economic  governance 
framework. The plans are to deliver on two objectives: i) ensuring that, by the end of 
the adjustment period, government debt is on a plausibly downward trajectory, or stays 
at prudent levels, and that the government deficit is brought and maintained below the 
reference value of 3% of GDP over the medium term, and ii) ensuring the delivery of 
reforms and investments responding to the main challenges identified in the context of 
the European Semester and addressing the common priorities of the EU. To that end, 
each plan is to present a medium-term commitment to a net expenditure4 path, which 

L, 

(OJ 

1466/97 

Regulation 

(EC)  No 

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 
ELI: 
Council 
http://data.europa.eu/eli/reg/2024/1263/oj). 
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). 
Council Directive (EU) 2024/1265 of 29 April 2024 amending Directive 2011/85/EU on requirements 
for  budgetary 
(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 Regulation (EU) 2024/1263, namely government expenditure 
net  of  (i)  interest  expenditure,  (ii)  discretionary  revenue  measures,  (iii)  expenditure  on  Union 
programmes fully matched by revenue from Union funds,  (iv) national expenditure on co-financing of 

the  Member  States 

frameworks  of 

2024/1263, 

30.4.2024, 

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effectively  establishes  a  budgetary  constraint  for  the  duration  of  the  plan,  covering 
four or five years (depending on the regular term of legislature in a Member State). In 
addition,  the  plan  is  to  explain  how  the  Member  State  will  ensure  the  delivery  of 
reforms and investments responding to the main challenges identified in the context of 
the  European  Semester,  in  particular  in  the  country-specific  recommendations 
(including  those  pertaining  to  the  macroeconomic  imbalances  procedure  (MIP),  if 
applicable),  and  how  the  Member  State  will  address  the  common  priorities  of  the 
Union. The period for fiscal adjustment covers a period of four years, which may be 
extended  by  up  to  three  years  if  the  Member  State  commits  to  delivering  a  set  of 
relevant reforms and investments that satisfies the criteria set out in Regulation (EU) 
2024/1263.  

(3) 

(4) 

Following the submission of the plan, the Commission is to assess whether it complies 
with the requirements of Regulation (EU) 2024/1263. 

Upon  a  recommendation  from  the  Commission,  the  Council  is  to  then  adopt  a 
recommendation to set the net  expenditure path  of the Member State concerned and, 
investment  commitments 
the  set  of  reform  and 
where  applicable,  endorses 
underpinning an extension of the fiscal adjustment period. 

CONSIDERATIONS  CONCERNING  THE  NATIONAL  MEDIUM-TERM  FISCAL  -
STRUCTURAL PLAN OF GREECE  

(5) 

On 7 October 2024, Greece submitted its national medium-term fiscal-structural plan 
to  the  Council  and  to  the  Commission.  The  submission  took  place  following  an 
extension  of  the  deadline  set  out  in  Article  36  of  Regulation  (EU)  2024/1263,  as 
agreed with the Commission on 24 September 2024 in view of the reasons provided by 
Greece. 

Process prior to the submission of the plan  

(6) 

5 

6 

On  21  June  2024  the  Commission  sent,  according  to  Article  9  of  Regulation  (EU) 
2024/1263,  the  reference  trajectory5  to  Greece.  The  Commission  published  the 
reference  trajectory  on  8  October  20246.  The  reference  trajectory  is  risk-based  and 
ensures that, by the end of the fiscal  adjustment period and in the absence of further 
budgetary  measures  beyond  the  adjustment  period,  general  government  debt  is  on  a 
plausibly  downward  trajectory  or  stays  at  prudent  levels  over  the  medium  term,  and 
the  general  government  deficit  is  brought  below  3%  of  GDP  over  the  adjustment 
period and maintained below that reference value over the medium term. The medium 
term  is  defined  as  the  ten-year  period  after  the  end  of  the  adjustment  period.  In 

programmes funded by the Union, (v) cyclical elements of unemployment benefit expenditure and (vi) 
one-offs and other temporary measures.  
Prior  guidance  transmitted  to  the  Member  States  and  Economic  and  Financial  Committee  includes 
trajectories  without  and  with  an  extension  of  the  adjustment  period  (covering  4  and  7  years, 
respectively).  It  also  includes  the  main  initial  conditions  and  underlying  assumptions  used  in  the 
Commission’s  medium-term  government  debt  projection  framework.  The  reference  trajectory  was 
calculated on the basis of the methodology described in the Commission’s Debt Sustainability Monitor 
2023  (https://economy-finance.ec.europa.eu/publications/debt-sustainability-monitor-2023_en).  It 
is 
based on the European Commission Spring 2024 Forecast and its medium-term extension up to 2033, 
and  long-term  GDP  growth  and  ageing  costs  are  in  line  with  the  joint  Commission-Council  2024 
Ageing  Report  (https://economy-finance.ec.europa.eu/publications/2024-ageing-report-economic-and-
budgetary-projections-eu-member-states-2022-2070_en). 
See: 
038a48dbfb11_en?filename=Commission_prior_guidance_-_greece_en.pdf 

https://economy-finance.ec.europa.eu/document/download/d3a360b9-a45d-49ac-8769-

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accordance  with  Articles  7  and  8  of  Regulation  (EU)  2024/1263,  the  reference 
trajectory  is  also  consistent  with  the  debt  sustainability  safeguard  and  the  deficit 
resilience safeguard. 

The  reference  trajectory  of  Greece  sets  out  that,  based  on  the  Commission’s 
assumptions and assuming a four-year adjustment period, net expenditure should not 
grow  by  more  than  the  values  provided  in  Table  1.  This  corresponds  to  average  net 
expenditure growth of 3.1% over the adjustment period (2025-2028). 

Table 1: Reference trajectory provided by the Commission to Greece on 21 June 2024 

Maximum net expenditure growth 
(annual, %) 

Source: Commission’s calculations. 

2025 

2026 

2027 

2028 

Average 2025-2028 

3.0 

3.2 

3.1 

3.0 

3.1 

(7) 

(8) 

(9) 

In  line  with  Article  12  of  Regulation  (EU)  2024/1263,  Greece  and  the  Commission 
engaged in a technical dialogue from July to September 2024. The dialogue centred on 
the net expenditure path envisaged by Greece and its underlying assumptions, as well 
as  the  envisaged  delivery  of  reforms  and  investments  responding  to  the  main 
challenges  identified  in  the  context  of  the  European  Semester  and  the  common 
priorities  of  the  Union  in  fair  green  and  digital  transition,  social  and  economic 
resilience, energy security and the build-up of defence capabilities. 

The plan submitted by Greece does not report on a consultation process with relevant 
stakeholders (including social partners) prior to submission. 

(HFC)  delivered  an  opinion  endorsing 

The  Hellenic  Fiscal  Council 
the 
macroeconomic forecast and the macroeconomic assumptions underpinning the multi-
annual net expenditure path. However, the Hellenic Fiscal Council called for vigilance 
regarding  external  shocks  and  macroeconomic  uncertainties.  The  Hellenic  Fiscal 
Council recommended the promotion of structural reforms in the goods, services and 
labour markets, as well as actions to address adverse demographic trends. 

(10)  The plan was discussed in the national parliament on 4 October 2024. 

Other related processes 

(11)  On  15  October  2024,  Greece  submitted  its  Draft  Budgetary  Plan  for  the  year  2025. 
The Commission adopted an opinion on this Draft Budgetary Plan on [26 November 
2024]7. 

(12)  On  19  June  2024,  the  Commission  concluded  that  Greece  is  experiencing 
macroeconomic imbalances. 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 weak8.  

7 
8 

Commission Opinion on the Draft Budgetary Plan of Greece, 26.11.2024, C(2024)9053 final. 
‘Communication from the Commission to the European Parliament, the Council, the European Central 
Bank, the European Economic and Social Committee, the Committee of the Regions and the European 
Investment Bank’, COM (2024) 600 final, Appendix 4 

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(13)  On  21  October  2024,  the  Council  addressed  to  Greece  a  series  of  country-specific 

recommendations (CSRs) in the context of the European Semester9. 

SUMMARY OF THE PLAN AND THE COMMISSION’S ASSESSMENT THEREOF 

(14) 

In  line  with  Article  16  of  Regulation  (EU)  2024/1263,  the  Commission  assessed  the 
plan as follows: 

Context: macroeconomic and fiscal situation and outlook  

(15)  Economic  activity  in  Greece  grew  by  2.3%  in  2023,  driven  by  private  consumption, 
investment  in  construction, and net  exports. According to  the European  Commission 
Autumn 2024 Forecast, the economy is expected to grow by 2.1% in 2024, driven by 
solid private consumption growth and accelerating equipment investment. At the same 
time, a surge in imports accompanied by sluggish export growth is expected to lead to 
a decline in net exports. In 2025, real GDP is set to increase by 2.3%, as consumption 
is  expected  to  continue  expanding  at  a  robust  pace  and  investment  is  forecast  to 
accelerate further, as the implementation of the recovery and resilience plan (RRP) is 
shifting from reforms towards investments. Net exports are assumed to remain a drag 
on  growth  as  import  growth  is  projected  to  remain  strong.  In  2026,  real  GDP  is 
expected to increase by 2.2%, as domestic demand is forecast to continue expanding at 
a  solid  pace,  while  net  exports  are  set  to  have  a  neutral  impact  on  GDP  growth. 
Potential GDP growth in Greece is expected to increase from 0.7% estimated for 2023 
to  2.0%  by  2026,  driven  by  rising  total  factor  productivity,  reflecting  the  positive 
impact  of  structural  reforms,  as  well  as  an  increasing  contribution  from  labour  and 
capital.  The  unemployment  rate  stood  at  11.1%  in  2023,  and  is  projected  by  the 
Commission to amount to 10.4% in 2024, 9.8% in 2025 and 9.2% in 2026. Inflation 
(GDP  deflator)  is  projected  to  decrease  from  5.9%  in  2023  to  3.5%  in  2024,  and  to 
reach 2.4% in 2025 and 2.2% in 2026.  

(16)  Regarding  fiscal  developments,  in  2023  Greece’s  general  government  deficit 
amounted  to  1.3%  of  GDP.  According  to  the  European  Commission  Autumn  2024 
Forecast, it is set to fall to 0.6% of GDP in 2024 and to decline further to 0.1% of GDP 
in 2025 and, on a no-policy change basis, to turn into a surplus of 0.2% in 2026. The 
European  Commission  Autumn  2024  Forecast  includes  Greece’s  preliminary  draft 
budget for 2025 that the government proposed to the national parliament in  October. 
General  government  debt  was  163.9%  of  GDP  at  end  2023.  According  to  the 
European Commission Autumn 2024 Forecast, the debt ratio is expected to decline to 
153.1% of GDP at end-2024. It is projected to decrease further to 146.8% of GDP by 
end-2025 and  142.7% by end-2026.  The  fiscal  forecast by the Commission does not 
consider  the  policy  commitments  in  the  medium-term  plans  as  such  until  they  are 
underpinned  by  credibly  announced  and  sufficiently  specified  concrete  policy 
measures. 

Net expenditure path and main macroeconomic assumptions in the plan 

(17)  Greece’s national medium-term fiscal-structural plan covers the period 2025-2028 and 

presents a fiscal adjustment over four years.  

(18)  The  plan  contains  all  information  required  by  Article  13  of  Regulation  (EU) 
2024/1263,  with  the  exception  of  the  information  on  the  consultation  of  domestic 

9 

Council Recommendation on economic, budgetary, employment and structural policies of Greece, not 
yet published. 

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stakeholders prior to the submission required by Article 13 (g) (vi) of Regulation (EU) 
2024/1263.  

(19)  The  plan commits  to the net  expenditure path  indicated  in  Table 2, corresponding to 
average  net  expenditure  growth  of  3.3%  over  the  years  2025-2028.  The  average  net 
expenditure  growth  reported  in  the  plan  over  the  adjustment  period  (2025-2028)  is 
higher than the reference trajectory transmitted by the Commission  on 21 June 2024. 
The  plan  assumes  potential  GDP  growth  to  increase  to  2.5%  in  2025  (from  1.2%  in 
2024), before decreasing to 1.5% in 2028. In addition, the plan expects the growth rate 
of  the  GDP  deflator  to  decrease  to  2.2%  in  2025  (from  3.0%  in  2024),  before 
increasing to 2.4% in 2028. 

Table 2: Net expenditure path and main assumptions in Greece’s plan  

2024 

2025 

2026 

2027 

2028 

Average over the 
period of validity of 
the plan 
2025-2028 

Net expenditure 
growth 
(annual, %) 
Net expenditure 
growth 
(cumulative, from 
base year 2023, %) 
Potential GDP 
growth (%) 
Inflation (GDP 
deflator growth) (%) 

2.6 

3.7 

3.6 

3.1 

3.0 

2.6 

6.5 

10.3 

13.7 

17.1 

1.2 

3.0 

2.5 

2.2 

2.4 

2.3 

1.7 

2.3 

1.5 

2.4 

3.3 

n.a. 

2.0 

2.3 

Source: Medium-term fiscal-structural plan of Greece and Commission calculations 
Implications of the plan’s net expenditure commitments for general government debt 

(20) 

If the net  expenditure path  committed to  in  the plan and the underlying assumptions 
materialise, general government debt would, according to the plan, gradually decrease 
from 153.7% in 2024 to 133.4% of GDP at the end of the adjustment period (2028), as 
per the following table. After the adjustment, over the medium term (i.e. until 2038), 
the  debt  ratio  is  projected  to  continue  to  decline  according  to  the  plan,  reaching 
114.9% by 2038. 

Table 3: General government debt and balance developments in Greece’s plan  

Government debt 
(% of GDP) 
Government balance 
(% of GDP) 

2023 

2024 

2025 

2026 

2027 

2028 

2038 

161.9 

153.7 

149.1 

143.1 

138.0 

133.4 

114.9 

-1.6 

-1.0 

-0.6 

-0.8 

-1.1 

-1.2 

-2.5 

Source: Medium-term fiscal-structural plan of Greece 

the  adjustment  period  under  all  deterministic  stress 

Thus,  according  to  the  plan,  the  general  government  debt  ratio  would  be  put  on  a 
downward path by the end of the adjustment period (2028). This is plausible as, based 
on the plan’s assumptions, debt is projected in the plan to decline over  the ten years 
the 
following 
Commission’s  Debt  Sustainability  Analysis,  and  the  stochastic  projections  indicate 
that  debt  would  decline  with  a  sufficiently  high  probability.  Therefore,  based  on  the 
plan’s policy commitments and macroeconomic assumptions, the net expenditure path 
put forward in the plan is consistent with the requirement for debt as set out in Articles 
6, point (a), and 16(2) of Regulation (EU) 2024/1263. 

tests  of 

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Implications  of  the  plan’s  net  expenditure  commitments  for  the  general  government 
balance 

(21)  Based  on  the  plan’s  net  expenditure  path  and  assumptions,  the  general  government 
deficit  would  decline  to  0.6%  of  GDP  in  2025  and  would  follow  a  gradual  upward 
trend reaching 1.2% of GDP by the end of the adjustment period. Thus, according to 
the plan, the general government balance would not exceed the 3% of GDP reference 
value at the end of the adjustment period 2028. In addition, in the ten years following 
the adjustment period (i.e. until 2038), the government deficit would not exceed 3% of 
GDP.  Therefore,  based  on  the  plan’s  policy  commitments  and  macroeconomic 
assumptions,  the  net  expenditure  path  put  forward  in  the  plan  is  consistent  with  the 
requirement for the deficit as set out in Articles 6, point (b), and 16(2) of Regulation 
(EU) 2024/1263. 

Time profile of the fiscal adjustment 

(22)  The  time  profile  of  the  fiscal  adjustment,  measured  as  the  change  in  the  structural 
primary balance, as described in the plan, is linear, as required by Article 6, point (c), 
of  Regulation  (EU)  2024/1263.  Therefore,  based  on  the  plan’s  policy  commitments 
and macroeconomic assumptions, the net expenditure path put forward in the plan is 
consistent with the no-backloading safeguard clause set out in Articles 6, point (c), and 
the transitional provision in Article 36(1), point (e), of Regulation (EU) 2024/1263. 

Table 4: Structural primary balance developments in Greece’s plan  

Structural primary balance 
(% of GDP) 
Change in structural primary 
balance 
(pps.) 

2023 

1.9 

2024 

1.9 

2025 

2.0 

2026 

2.1 

2027 

2.2 

2028 

2.3 

n.a. 

0.1 

0.1 

0.1 

0.1 

0.1 

Source: Medium-term fiscal-structural plan of Greece 
Consistency with the deficit resilience safeguard 

(23) 

If  the  plan’s  assumptions  and  commitments  materialise,  the  structural  deficit  would 
remain below 1.5% of GDP throughout the adjustment period. Therefore, based on the 
plan’s  policy  commitments  and  macroeconomic  assumptions,  the  common  resilience 
margin  referred  to  in  Article  8(1)  of  Regulation  (EU)  2024/1263  will  continue  to  be 
respected, and therefore the additional improvement in the structural primary balance 
referred to in Article 8(2) of Regulation (EU) 2024/1263 is not required. 

Consistency of the plan with the debt sustainability safeguard 

(24) 

In accordance with  Article 7 of Regulation  (EU) 2024/1263,  as the government  debt 
will be above 90% of GDP over the adjustment period according to the plan, the debt 
ratio is  required to  decline by at  least  1 percentage point  on average per  year until  it 
falls  below  90%,  after  which  it  should  decline  by  0.5 percentage points  on  average. 
This  average  decline  is  calculated  over  the  period  2024-2028  and  amounts  to  5.1 
percentage  points  (see  Table  3).  Therefore,  based  on  the  plan’s  policy  commitments 
and macroeconomic assumptions, the net expenditure path put forward in the plan  is 
consistent with the debt sustainability safeguard. 

Macroeconomic assumptions of the plan 

(25)  The  plan  is  based  on  a  set  of  macroeconomic  and  fiscal  assumptions  which  differs 
from  the  Commission’s  assumptions  transmitted  to  Greece  on  21  June  2024.  In 
particular,  the  plan  uses  different  assumptions  for  four  variables,  namely  the  initial 

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fiscal position (i.e. the structural primary balance in 2024), potential GDP growth, the 
net budgetary impact of one-off measures in 2024 and the assumed revenue elasticity. 
A  careful  assessment  of  these  differences  in  assumptions  is  necessary,  especially  as 
average net  expenditure  growth  in  the plan is higher than in  the reference trajectory. 
The  differences  in  assumptions  with  the  most  significant  impact  on  average  net 
expenditure  growth  are  listed  below,  together  with  an  assessment  of  each  difference 
considered in isolation. 

• 

• 

• 

The plan uses more up-to-date data for the initial fiscal position and projects 
the  general  government  deficit  at  0.6%  of  GDP  in  2024,  compared  to  a 
projected 1.2% of  GDP deficit in  the prior guidance of spring 2024. This is 
due  to  higher-than-expected  tax  revenues  based  on  outturn  data  and  an 
additional revenue-increasing fiscal policy measure announced in June 2024. 
Consequently, this assumption is deemed to be duly justified. This projection 
is more cautious than the European Commission 2024 Autumn forecast. As a 
result,  according  to  the  plan,  the  structural  budget  deficit  is  set  to  be  below 
1.5% of GDP in 2024, while the reference trajectory was based on a structural 
budget  deficit  of  1.7%  of  GDP  for  the  same  year  in  line  with  the 
Commission’s assumptions. This implies that the deficit resilience safeguard 
does  not  apply  given  that  in  the  plan  the  structural  deficit  is  assumed  to  be 
below  1.5%  of  GDP  in  2024,  thus  contributing  to  higher  average  net 
expenditure growth over the adjustment period in the plan than according to 
the Commission’s assumptions.  

The plan assumes potential GDP growth to increase from an estimated 0.6% 
in 2023 to 2.5% by 2026 and to moderate to 1.5% by 2028, averaging at 2% 
over  the  adjustment  period.  In  the  prior  guidance  of  the  Commission, 
potential  output  is  projected  to  grow  by  1.3%  on  average  over  the  same 
period.  Beyond  the  adjustment  period,  the  plan  assumes  slower  potential 
growth  compared  to  the  Commission’s  assumption.  Overall,  the  average 
potential  growth  assumed  in  the  plan  over  the  period  of  2025-2038  is 
consistent  with  the  Commission’s  assumption,  but  the  potential  growth 
profile  is  more  volatile.  This  difference  contributes  to  higher  average  net 
expenditure growth over the adjustment period in the plan than according to 
the  Commission’s  assumptions.  This  assumption  is  not  consistent  with  the 
common DSA framework.  

The  plan  assumes  a  revenue  elasticity  of  0.825  as  opposed  to  the  unitary 
elasticity  to  potential  GDP  growth  assumed  by  the  Commission.  This 
contributes  to  a  lower  required  adjustment  and  hence  a  lower  average  net 
expenditure growth over the adjustment period in the plan than according to 
the Commission’s assumptions. The plan justifies the different assumption by 
referring  to  empirical  literature  indicating  that,  over  the  preceding  years, 
Greece’s  revenue  elasticity  had  been  lower  than  the  EU  average.  This 
difference  compared  with  the  Commission’s  assumptions  is  on  the  cautious 
side,  motivated  by  prudent  budgetary  policymaking,  and  therefore  it  is  duly 
justified.  

The remaining differences in assumptions do not have a significant impact on average 
net expenditure growth compared to  the Commission’s assumptions. On balance, the 
impact on average net expenditure growth from the more cautious assumption on the 
elasticity balances that of the different assumption on potential GDP growth. In turns, 
this  implies  that  the  difference  between  the  net  expenditure  path  in  the  plan  and  the 

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reference trajectory is only explained by the updated initial fiscal position. Overall, all 
the  differences  in  assumptions  taken  together  lead  to  an  average  net  expenditure 
growth  in  the  plan  that  is  higher  than  the  reference  trajectory.  Based  on  this 
assessment,  the  plan  fulfils  the  requirement  under  Article  13(b)  of  Regulation  (EU) 
2024/1263. The Commission will take into account the above assessment of the plan’s 
assumptions in future assessments of compliance with the net expenditure path. 

Fiscal strategy of the plan 

(26)  According  to  the  indicative  fiscal  strategy  in  the  plan,  the  commitments  on  net 
expenditure will be delivered through  fiscal policy measures on both the expenditure 
and  revenue  side  of  the  budget,  along  with  changing  priorities  of  fiscal  policy.  The 
fiscal strategy set out in the plan includes measures that aim to strengthen disposable 
income and address  demographic challenges and  housing needs  without jeopardising 
compliance with the net expenditure growth path. The net expenditure path allows for 
an  increase  in  net  expenditures  by  3.3%  per  year  on  average.  Within  this  margin, 
Greece  is  planning  to  undertake  revenue  decreasing  measures  such  as  a  decrease  in 
social solidarity contributions and the abolition of the lump-sum tax for self-employed 
as  well  as  expenditure  increasing  measures,  the  most  important  being  the  gradual 
increase in public sector wages induced by the planned increase of the minimum wage. 
Other measures include interventions to support families with children and actions for 
affordable  housing  and  increasing  the  housing  stock.  The  specification  of  the  policy 
measures  to  be  adopted  is  to  be  confirmed  or  adjusted  and  quantified  in  the  annual 
budgets. There are some risks to the implementation of the indicative fiscal strategy in 
the plan, arising from pending legal cases, most notably the litigation cases against the 
Public Real Estate Company which may imply restraint in other net expenditure items. 
The Draft Budgetary Plan for 2025 is consistent with the net expenditure commitment 
for 202510. 

Reform  and  investment  intentions  in  the  plan  responding  to  the  main  challenges 
identified in the context of the European Semester and addressing the common priorities 
of the Union  

(27)  The plan describes policy intentions concerning reforms and investments to respond to 
the main challenges identified in the context of the European Semester, especially the 
CSRs, including those pertaining to the MIP, and to address the common priorities of 
the  EU.  The  plan  includes  about  226  reforms  and  investments,  of  which  132  are 
financially supported by the Recovery and Resilience Facility, and 52 by the cohesion 
policy funds. 

(28)  Concerning  the  common  priority  of  a  fair  green  and  digital  transition,  including  the 
climate  objectives  set  out  in  Regulation  (EU)  2021/1119,  the  plan  includes  eighty-
eight  reforms  and  investments  that  Greece  expects  will  contribute  towards  its  green 
and  digital  transition.  A  significant  number  of  the  reforms  and  investments  on  the 
green  transition  features  as  measures  in  the  Greek  RRP,  including  the  REPowerEU 
chapter,  or  are  supported  by  cohesion  policy  funds.  For  example,  the  reforms  and 
investments contained in the plan are expected to contribute to address specific CSRs, 
including  by  reducing  Greece’s  reliance  on  fossil  fuels  through  expanding  the 
electricity  production  from  renewable  energy  sources,  including  offshore  wind  and 
hydrogen, as well as enhancing the capacity of the energy infrastructure and networks 
(2023  and  2022  CSRs  on  renewable  energy,  energy  infrastructure  and  networks). 

10 

See Commission Opinion on the Draft Budgetary Plan of Greece, 26.11.2024, C(2024)9053 final. 

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Other  reforms  and  investments  in  the  plan  aim  to  improve  the  country’s  energy 
efficiency  of  its  building  stock  (2023  and  2022  CSRs  on  energy  efficiency), 
restructure  the  municipal  water  management  entities  and  strengthen  irrigation  and 
wastewater  management  infrastructure  (2019  CSR  on  environmental  policy  and 
resource  management),  and  prepare  special  spatial  plans  and  strengthen  the  civil 
protection  management  system  (2024  CSR  on  climate  adaptation).  The  Greek  plan 
also  includes  some  reforms  and  investments  that  aim  to  electrify  Greece’s  transport 
sector,  including  an  organisational  reform  in  the  railways  sector  and  investments  to 
expand the charging points for electric vehicles across Greece, which are expected to 
contribute towards a more sustainable transport sector (2024, 2023 and 2022 CSRs on 
transport).  As  concerns  the  digital  transition,  examples  of  reforms  and  investments 
included in the plan are a reform that aims to complete the national cadastre, which is 
the  business  environment  (2023  CSR  on  business 
expected 
environment), an investment aiming to digitalise public archives, which is expected to 
contribute towards the digitalisation of the public administration (2020 and 2019 CSRs 
on  digitalisation  of  public  administration  and  public  services)  and  an  investment 
aiming  to  support  the  development  of  digital  tools  to  Greek  SMEs  (2019  CSR  on 
digitalisation of businesses). The majority of reforms and investments that are part of 
the plan and aims to contribute towards Greece’s digital transition is part of the Greek 
RRP or are supported by cohesion policy funds. 

to  strengthen 

(29)  Concerning  the  common  priority  of  social  and  economic  resilience,  including  the 
European  Pillar  of  Social  Rights,  the  plan  includes  ninety-four  reforms  and 
investments  that  Greece  expects  will  contribute  to  strengthening  the  country’s  social 
and  economic  resilience.  Examples  of  reforms  and  investments  that  are  part  of  the 
Greek plan and related to specific CSRs, include modifications of Greece’s tax policy 
framework, which is expected to  contribute to broaden the base of income taxes and 
enhance the operational autonomy of the tax administration (2023 and 2022 CSRs on 
taxation  policy  and  tax administration),  the  rollout  of  the  primary  healthcare  reform, 
which is expected to contribute to the accessibility, adequacy and sustainability of the 
healthcare (2023 and 2022 CSRs on healthcare) increase public and private investment 
in  research  and  development  (2019  CSR  on  research  and  innovation);  as  well  as 
promoting 
to  strengthen  social  cohesion,  education  and 
employability that is expected to contribute towards the upskilling and reskilling (2019 
and 2023 CSRs on skills, vocational education and training and adult learning as well 
as  education  and  2019  CSR  on  active  labour  market  policies  and  ensuring  social 
inclusion). Furthermore, the plan includes reforms and investments  that are expected 
to contribute towards the modernisation of the public administration (2024, 2023 and 
2022  CSRs  on  public  administration)  further  reducing  the  stock  of  non-performing 
loans (2024 and 2023 CSRs on private sector debt and insolvency framework and on 
financial stability, which are also linked to the MIP) and a reform aiming to restructure 
the  Hellenic  Corporation  of  Assets  and  Participations  (2024  CSR  on  state-owned 
enterprises).  The  plan  does  not  contain  specific  reforms  that  aim  at  improving  the 
investment friendliness of the taxation system by reinforcing its legal certainty (2024, 
2023 and 2022 CSRs on taxation policy, which are also linked to the MIP).  

investments  aiming 

(30)  Concerning the common priority of energy security, the plan includes eleven reforms 
and  investments  that  Greece  expects  will  contribute  towards  strengthening  the 
country’s  energy  security  and  to  contribute  to  addressing  specific  CSRs.  These 
reforms  and  investments  measures  are  all  part  of  Greece’s  RRP,  including  its 
REPowerEU  chapter.  For  example,  the  Greek  plan  contains  reforms  to  increase  the 
country’s storage capacity and improve its energy efficiency (2023 and 2022 CSR on 

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energy  infrastructure  and  energy  efficiency).  Further,  the  plan  contains  investments 
aiming  to  further  increase  the  electricity  production  from  renewable  energy  sources 
and  strengthen  the  capacity  of  the  electricity  networks  (2023  and  2022  CSRs  on 
renewable energy and networks), which are also expected to make Greece less reliant 
on fossil fuels, thereby strengthening its energy security.  

(31)  Concerning  the  common  priority  of  defence  capabilities,  the  plan  includes  fourteen 
reforms and investments, one of which is part of the Greek RRP, that Greece expects 
will contribute towards strengthening the country’s defence capabilities.  

(32)  The  plan  provides 

information  on 

the  consistency  and,  where  appropriate, 
complementarity, with the cohesion policy funds and Greece’s RRP. Specifically, the 
plan  contains  detailed  tables  per  ministry  that  set  out  the  relevant  reforms  and 
investments for each common priority, their link to CSRs and whether they are part of 
the RRP or other EU-funding instruments (mainly EU cohesion policy funds).  

(33)  The plan provides an overview of the public investment needs of Greece related to the 
common priorities of the EU and aims to contribute to meet those investment needs. 
For the green and digital transition  priority, the plan lists the main priorities that the 
cohesion  policy  funds  will  cover,  including  the  Just  Transition  Development 
Programme,  while  it  also  lists  specific  investment  needs  per  ministry  that  covers 
investments  that  are  part  of  the  Greek  RRP.  The  plan  states  that  30%  of  the  total 
budget  from  cohesion  policy  funds  for  the  period  2021-2027  has  been  allocated  to 
policies  dedicated  to  actions  for  green  transition.  For  the  social  and  economic 
resilience  priority,  including  the  European  Pillar  of  Social  Rights,  the  plan  lists  the 
main priorities that the cohesion policy funds (2021-2027) will cover, including ESF+, 
while it also lists specific investment needs per ministry that covers investments that 
are part of the Greek RRP. For the energy security priority, the plan makes reference 
to the investment “Independent Natural Gas System (ASFA) Alexandroupolis”, which 
will be supported by cohesion policy funds, and is expected to significantly contribute 
towards  the  natural  gas  sources  diversification  of  Greece,  thereby  allowing  for  the 
further reduction of the country’s dependency on natural gas originating from Russia. 
For the priority to build-up of defence capabilities, the plan lists specific projects that 
will be carried out by the Ministry of National Defence and the Ministry of Citizens’ 
Protection, including to strengthen Greece’s defence industry with the contribution of 
the  Hellenic  Centre  for  Defence  Innovation  and  the  provision  of  unmanned  aerial 
systems for border surveillance. 

Conclusion of the Commission’s assessment 

(34)  Overall, the Commission is of the view that Greece’s plan fulfils the requirements of 

Regulation (EU) 2024/1263. 

OVERALL CONCLUSION 

(35) 

In accordance with Article 17 of Regulation (EU) 2024/1263, the net expenditure path 
as set in the plan should be recommended by the Council to Greece. 

HEREBY RECOMMENDS that Greece 

(1) 

Ensure  that  net  expenditure  growth  does  not  exceed  the  maxima  established  in 
Annex I to this Recommendation. 

In  addition,  the  Council  invites  Greece  to  ensure  the  delivery  of  reforms  and 
investments  responding  to  the  main  challenges  identified  in  the  context  of  the 

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European  Semester,  in  particular  in  the  country-specific  recommendations,  and 
addressing the common priorities of the Union. 

ANNEX I 
Maximum growth rates of net expenditure 
(annual and cumulative growth rates, in nominal terms) 
Greece 
2025 
3.7 
6.5 

Annual 
Cumulative (*) 

2027 
3.1 
13.7 

2026 
3.6 
10.3 

2028 
3.0 
17.1 

Years 

Growth 
rates 
(%) 

(*) The cumulative growth rates are calculated by reference to the base year of 2023.  

Done at Strasbourg, 

For the Council 
The President 

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