EU’s Moscovici: No more memoranda but Greece will be under supervision

by Aggelos Skordas

European Commissioner for Economic and Financial Affairs Pierre Moscovici signaled the end of memoranda era for Greece during his two-day Athens visit. The European Union official expressed his support for the country’s debt relief program and highlighted that despite the fact that no new memoranda will be imposed upon Greece after August, when the third bailout program ends, its economic policies will continue to be under close supervision.

On Thursday morning, Moscovici accompanied by fellow Commissioner for Migration, Home Affairs and Citizenship Dimitris Avramopoulos were received by the President of the Hellenic Republic Prokopis Pavlopoulos. He appeared optimistic on the issue of debt relief underlining that “our efforts will be implemented and they will be successful”.

Moscovici was later received by Greece’s Prime Minister Alexis Tsipras and reiterated his optimism regarding the Greek economy. Furthermore, he expressed his belief that “now is the time to prepare our steps carefully, because next summer it will be a historic landmark for Greece”. “After eight years [of memoranda], I think it is time to make plans and organise the next day”, he characteristically stressed, adding that Greece will have a “clear exit” from the memoranda.

In an interview with the state-run Athens Macedonian News Agency (AMNA), Moscovici said it is his desire to see Greece becoming again a “normal European country” in economic terms. The “light at the end of the tunnel” is now visible and Greece’s exit from harsh austerity is close he pointed out: “Because many of the program commitments will continue to be implemented long after the program ends, there will also need to be an appropriate type of post-program surveillance in place. But let us be clear: there will be no more memoranda.”

As he explained, the process of the Greek economy will also be monitored through a scheme of all European Union member states, the so-called European Semester. Introduced in 2010, it allows the countries to discuss their economic and budget plans and monitor progress at specific times throughout the year. On an annual basis, the Commission undertakes a detailed analysis of each country’s plans for budget, macroeconomic and structural reforms. It then provides the governments with country-specific recommendations for the next 12-18 months, while it monitors the countries’ efforts towards the “Europe 2020” targets.

Commenting on the next months Moscovici said that they “constitute the home stretch of the memorandum era”, which began in 2010:  “We all know how difficult these years have been for the Greek people. Now, the light can be clearly seen at the end of the tunnel. The swift, smooth and successful conclusion of the third review bodes well for the next steps. Thereafter there is just one, final review left to complete before the program concludes in the summer. There is every reason to hope and expect that the final review will go equally smoothly, provided the good constructive spirit that has defined the cooperation over recent months is maintained by all partners.”

Finally, regarding Greece’s public debt, which stands at almost 180% of the GDP, the European Commissioner acknowledged that it remains a problem that must be addressed: “My approach, and the Commission’s approach, is to support the discussions underway with one goal – to facilitate an agreement on a credible process to ensure that Greece’s debt is sustainable. Technical work is now underway on a mechanism for debt relief tied to economic growth, an idea that was first proposed last year and supported by the June 2017 Eurogroup statement.”