The Ministry of National Economy and Finance has described the European Commission’s announcement within the framework of the European Semester 2026 as a highly significant development for the Greek economy. For the first time since the outbreak of the sovereign debt crisis, the Commission has concluded that Greece no longer faces macroeconomic imbalances, removing the country from the relevant monitoring category.
According to the Ministry, this marks a development of considerable historical importance. Following the memorandum period (2010–2018), the Enhanced Surveillance framework (2018–2022), Greece’s prolonged classification under Excessive Macroeeconomic Imbalances between 2019 and 2024, and its placement in the Macroeconomic Imbalances category in 2025, the country has now returned to what officials describe as full European normality.
The significance of this decision is further underscored by the fact that it comes at a time when ten European Union member states remain subject to the Excessive Deficit Procedure. This reflects not only Greece’s remarkable fiscal improvement but also the substantial reduction of external imbalances and structural weaknesses that once posed risks to the country’s economic stability.
European Commission Recognises Strong Economic Progress
In its assessment, the European Commission notes that vulnerabilities related to both public and external debt have declined significantly in recent years.
According to the report, sustained economic growth, fiscal surpluses, stronger banking-sector balance sheets, and the implementation of structural reforms have played a decisive role in reducing the risks that long characterized the Greek economy.
The Commission highlights several key improvements:
- Government debt continues to follow a steady downward trajectory.
- External imbalances have narrowed.
- Banks have significantly strengthened their balance sheets.
- Labour market conditions have improved further.
- Extensive reforms have been implemented in the business environment, labour market, and tax administration.
Sustained Growth Amid Global Uncertainty
Despite an environment marked by elevated uncertainty across Europe and the global economy, Greece recorded economic growth of 2.1% in 2025.
The European Commission forecasts growth of 1.8% in 2026, double the projected Eurozone average of 0.9%, underlining the resilience and competitiveness of the Greek economy.
Fiscal Surpluses and Strong Public Finances
Greece recorded a general government surplus of 1.7% of GDP in 2025, up from 1.3% in 2024.
According to the Commission, this performance was driven by:
- Containment of current expenditure.
- Lower debt-servicing costs.
- Increased tax revenue collection.
Notably, these results were achieved while implementing reductions in social security contributions, increasing public-sector wages, and introducing targeted support measures for households.
Europe’s Fastest Debt Reduction Continues
The Commission projects a further significant decline in Greece’s public debt ratio:
- 154.2% of GDP in 2024
- 146.1% of GDP in 2025
- 140.7% of GDP in 2026 (forecast)
- 134.4% of GDP in 2027 (forecast)
If these projections are realised, Greece will reduce its debt-to-GDP ratio by nearly 20 percentage points within three years.
The Commission attributes this trend primarily to strong nominal economic growth and the maintenance of fiscal surpluses.
Recognition of Reforms and Digital Transformation
The report places particular emphasis on the reform agenda implemented in recent years.
Specific reference is made to:
- The digitalisation of tax administration.
- The digitalisation of customs procedures and controls.
- The development of digital compliance tools.
- Significant progress in reducing the VAT gap.
- Strengthened tax compliance across the economy.
The Commission also highlights progress in modernising public administration. It notes that the public-sector wage bill is projected to reach 10.2% of GDP in 2025, remaining broadly in line with the European Union average of 10.3%.
Strong Performance in European Funding Programmes
The Commission notes that Greece is implementing Cohesion Policy programmes at a faster pace than the EU average, both in terms of project selection and fund disbursement.
It also acknowledges the substantial contribution of the Recovery and Resilience Facility in supporting investments and reforms that enhance the economy’s competitiveness, productivity, and resilience.
New European Flexibility for Energy Security Investments
The European Commission has additionally proposed expanding the scope of the existing National Escape Clause to allow, under specific conditions, greater flexibility for expenditure and investments aimed at strengthening energy security and reducing dependence on imported fossil fuels.
The proposed framework would permit:
- Annual flexibility of up to 0.3% of GDP between 2026 and 2028.
- A cumulative ceiling of 0.6% of GDP for energy resilience investments.
This would complement the flexibility mechanisms already established for defence spending.
The initiative is expected to create additional opportunities for accelerating strategic investments financed through national resources in areas such as energy infrastructure, energy security, and economic resilience, while making greater use of the budgetary flexibility available under EU fiscal rules.
Another Milestone in Greece’s Economic Recovery
Today’s decision by the European Commission represents one of the most important institutional recognitions of Greece’s economic progress in recent years.
The country’s exit from the Macroeconomic Imbalances framework, combined with sustained fiscal surpluses, continued debt reduction, labour market improvements, structural reforms, and effective use of European funding instruments, points to an economy that has decisively moved beyond the conditions of the crisis era.
Taken together, these developments reinforce Greece’s trajectory towards greater stability, credibility, and resilience within the European economic framework.
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