Greece in the European Semester Policy Framework post-Covid19 - - PowerPoint PPT Presentation

Greece in the European Semester Policy Framework post-Covid19

Presentation by Declan Costello

Deputy Director General DG Economic and Financial Affairs European Commission European Semester e-Conference: Stimulating a resilient recovery for Greece through investments, digital transformation and green economy 1 July 2020

A new paradigm to address interrelated challenges

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Adjusting the Semester to the COVID-19 crisis

• Activated the General Escape Clause of Stability and Growth Pact
• Five broad priorities for all Member States to support the crisis response:
• Investment in public health and the resilience of the health sector
• Preserving employment, tackling social impacts and developing skills
• Supporting businesses, with a focus on SMEs
• Ensuring liquidity provision and stability in the financial sector
• Preserving the Single Market and ensuring the flow of critical goods
• Forward looking guidance (with 2019 CSRs remaining valid)
• green & digital transition
• promoting employment and social fairness
• ensuring everybody pays their share (Aggressive Tax Planning/Anti Money Laundering)
• A Recovery and Resilience Fund managed via the European Semester

Country Specific Recommendations for Greece

CSRs published on 20 May → expected to be adopted by the Council in July

CSR1 Taking all necessary measures to effectively address the pandemic, sustain the economy and support the ensuing recovery, in line with the general escape clause CSR2 Supporting employment and businesses through the crisis and the recovery CSR3 Promote investments, in particular for the green and digital transitions CSR4 Completing reforms in line with the post-programme commitments

Non performing loans Debt by sector

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Legacy issue: high share of NPLs and high public debt

5 10 15 20 25 30 35 40

EL CY PT IT BG PL HR LV RO HU SI IE ES MT SK FR AT BE LT DK NL EE CZ FI DE UK SE LU EA EU

Non-financial Corporations Households Others - not allocated

% of total loans and advances

50 100 150 200 250 300 350 400 450 2006 2008 2010 2012 2014 2016 2018 General government Households; NPISH Non-financial corporations Financial corporations EA public debt EA debt % of GDP

Current account Export performance

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Persistent current account deficit and weak export performance

20 40 60 80 100 120 140 08Q1 09Q1 10Q1 11Q1 12Q1 13Q1 14Q1 15Q1 16Q1 17Q1 18Q1 19Q1 20Q1 % of GDP CY DE ES FR IE IT PT SI EL

• 25
• 20
• 15
• 10
• 5

5 10 15 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 1819*

Trade balance - goods Trade balance - services Capital account Income balance Trade balance Current account balance

% of GDP

For each quarter, figure refers to the sum

• f 4 quarters previous to each data point

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A productivity and investment gap

90 95 100 105 110 115 120 05Q4 06Q4 07Q4 08Q4 09Q4 10Q4 11Q4 12Q4 13Q4 14Q4 15Q4 16Q4 17Q4 18Q4 19Q3 EL IT FR PT EA19 Labour productivity, whole economy, index Q1 2005 =100 5 10 15 20 25 30 2004 2006 2008 2010 2012 2014 2016 2018

EL Corporate investment EL households; NPISH investment EL public investment EA public investment EA total investment % of GDP

Investment Gap 18 bn

Green transition

• Environment: Municipal Solid Waste (MSW)

management relies mainly on landfill disposal (80%) and 15% of collected MSW are recycled

• vs. EU average of 45% and 37%
• Energy: per capita greenhouse gas emissions

(GHG) are 3% higher than the EU average - due to the fossil fuels dependency of the energy sector

• Transport: Greek fleet for medium- and

heavy-duty vehicles among oldest (18.7 years in Greece vs. EU-average of 11.7)

Digital transition

• Latest overall Digital Economy and Society

Index (DESI) → Greece ranked second last in the EU

• Connectivity infrastructure and level of

digital skills lag those of Greece’s EU peers

• Degree of digitisation of businesses is far

below the EU average (e.g. use of cloud services by only 7% of firms versus 18% in the EU)

• Digital public services indicators have

started to close the gap with EU peers but remain among the weakest (e.g. 39% uses e- government services vs. 67% EU average)

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Greece and the green and digital transition

Thank you

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