Greece is off EU’s budget watch-list

CAIRO – 13 July 2017: The European Union's (EU) executive arm recommended on Wednesday taking Greece off the ’EU budget offenders’ list. After eight years of hard work, this move would help Greece to start tapping financial markets for money soon.

#BREAKING EU recommends ending deficit measures against Greece

— AFP news agency (@AFP) July 12, 2017

The EU recommendation is a result of the remarkable turnaround in the government budget, with a surplus of 0.7 percent compared to the peak deficit of 15.1 percent in 2009. Greece recently released €7.7 billion ($8.79 billion) of bailout funds, which means the country has enough money to pay upcoming debts and its budget surplus will help it build up cash balances to pay them in the future.

"This is a very symbolic moment for Greece," said Pierre Moscovici, the EU's top economy official. "It's the end of austerity, and the end of austerity also means we need to move to a strategy that's based on growth, job creation and social fairness," he added, according to Euronews.

The Greek government welcomed the move, according to Euronews, and said in a statement that it is "becoming clear that the Greek economy is steadily returning to European normality, restoring confidence lost due to the decisions made that had brought the country to the brink of collapse in 2010."

Greece’s debt crisis exploded in 2009 following a statistics scandal that revealed that Greece’s budget deficit peaked to 15.1 percent, while the EU deficit limit is 3 percent. Since the scandal, Greece has been put on the EU’s budget watch list.

Despite the EU’s recommendation, Greece remains subject to the demands of its bailout program. The country hopes to exit its bailout era next year and is planning to start tapping bond markets, possibly in the next few months.

Following the crisis in 2009, Greece found itself unable to borrow money in bond markets. By May 2010, it required an international bailout to avoid going bankrupt, and it's been reliant on rescue funds ever since. In return for $340 billion over three bailout programs, successive governments enacted waves of economic reforms, including spending cuts and tax increases.