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2001 EN Official Journal of the European Communities C 77/1



of 12 February 2001

on the stability programme of Greece, 2000-2004

(2001/C 77/01)

THE COUNCIL OF THE EUROPEAN UNION, The Council considers that the projected budgetary position
provides adequate safety margin against breaching the 3 % of
Having regard to the Treaty establishing the European GDP deficit threshold in normal circumstances and is in
Community, conformity with the requirements of the stability and growth
pact. The Council commends the fiscal consolidation strategy
Having regard to Council Regulation (EC) No 1466/97 of 7 July of the programme, centred on high primary surpluses, which is
1997 on the strengthening of the surveillance of budgetary essential in reducing rapidly the still very high government
positions and the surveillance and coordination of economic debt ratio and prepares for future challenges, notably the
policies (1), and in particular Article 5(2) thereof, budgetary burden from ageing population. The Council
considers, however, that such a strategy should be primarily
Having regard to the recommendation of the Commission, based on an adequate control of primary expenditure increase
through clear and binding norms with the aim of reducing the
After consulting the Economic and Financial Committee, current expenditure ratio.

HAS DELIVERED THIS OPINION: The Council warns that under conditions of high GDP growth,
according to the projections, combined with easing monetary
On 12 February 2001, the Council examined the first stability conditions, renewed inflationary pressures may persist; the
programme of Greece which covers the period 2000-2004. Council considers that risks of overheating of the economy
The stability programme was submitted by the Greek need to be contained through determined support from
Government within six months of the Council Decision of domestic policies, mainly a tight fiscal stance, in particular
19 June 2000 on the adoption by Greece of the single through restraint on current expenditure, and by ensuring
currency on 1 January 2001 (2). wage moderation.

The stability programme is projecting robust real GDP growth The Council notes that the programme includes a number of
rates, accelerating from 4,1 % in 2000 to 5,5 % in 2004, market liberalisation measures, the setting-up of an appropriate
supported by high investment rates, strong exports and regulatory framework and structural reforms in the labour,
sustained private consumption. The Council considers the product and capital markets while a reform of the social
real GDP growth forecasts included in the stability security system is announced for 2001. The Council considers,
programme as ambitious, at the upper range of possibilities. however, that the ambitious growth and employment objectives
The programme presents also an alternative scenario projecting of the stability programme, and future challenges, require a
lower, though still robust, real GDP growth based in particular more determined attitude in the reform effort; the Council
on a higher assumption for imported oil prices. encourages the Greek Government to accelerate the implemen-
tation of necessary reforms, in particular in the labour market
On the basis of the baseline macroeconomic scenario, the and the social security system, in order to enhance the
programme is projecting a general government surplus of potential of the economy, strengthen its competitiveness and
0,5 % of GDP in 2001 which will rise to 2 % of GDP in improve the conditions for sustainable growth and employment
2004. The programme is based on the fiscal consolidation creation.
strategy followed until now by the Greek convergence
programmes, consisting in maintaining high primary The Council considers that the stability programme is
surpluses supported, however, by a significant reduction in consistent with the broad economic policy guidelines. The
interest payments as percent of GDP, resulting from lower Council invites the Greek authorities to pay particular
interest rates and a declining government debt ratio. The attention to the need for reform of the pension system, and
general government debt ratio is expected to decline by 20 invites them to address the budgetary consequences of ageing
percentage points of GDP, to 84,0 % of GDP in 2004. in the next update of the stability programme.

(1) OJ L 209, 2.8.1997, p. 1.

(2) OJ L 167, 7.7.2000, p. 19.