MNI: Greece Exits EU Excessive Deficit Procedure

--Move Leaves France, Spain, and UK in EDP

     BRUSSELS (MNI) - Greece has exited its Excessive Deficit Procedure Monday,

after European Union member states approved the move. No formal discussion was

held, as it is clear that the Greek deficit is now under the EU legal threshold

of 3% of GDP.

     "After many years of severe difficulties, Greece's finances are in much

better shape. Today's decision is therefore welcome", said Toomas Toniste,

Estonian Finance Minister, who currently holds the Council presidency. 

     "We are now in the last year of the financial support programme, and

progress is being made to enable Greece to again raise money on the financial

markets at sustainable rates," he added.

     Athens had a positive balance of 0.7% of GDP through 2016 and it is

expected to have a deficit of 1.2% in 2017, according to both Eurostat and EU

Commission's forecasts.

     In the light of this, the Council found that "Greece fulfils the conditions

for closing the excessive deficit procedure."

     The end of the EDP is a symbolic step forward for the highly indebted

country. But it wouldn't materially change its obligations to comply with the

financial support program agreed in August 2015, which runs until 2018 and

involves a comprehensive set of structural reforms in exchange of low-interest

loans.

     "Today's decision by the Council closing Greece's Excessive Deficit

Procedure is recognition of the tremendous efforts and sacrifices the Greek

people have made to restore stability to their country's public finances... This

turnaround has no parallels in Europe," European Commissioner Pierre Moscovici

said Monday

     "We must now ensure that this positive momentum is maintained. As we have

seen in recent weeks, confidence is fragile and must be nurtured. There needs to

be constructive cooperation between all institutions and the Greek authorities

to ensure a smooth and swift conclusion of the third review, with no unnecessary

drama. That will pave the way for a successful conclusion of the programme next

summer and for the opening of a new and optimistic chapter for Greece and for

the euro area as a whole," he added.

     ONLY THREE COUNTRIES LEFT IN EDP

     The move leaves 3 EU countries in the Excessive deficit procedure: France,

Spain, and the UK. France and the UK are expected to reach the 3% threshold this

year, and to formally exit the EDP in 2018, if their public finances remain on a

sustainable trajectory. Spain is expected to reach the threshold in 2018, with

exit in 2019.

     Portugal and Croatia exited the EDP in mid-June, as reported by MNI.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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