In its 2026 European Semester assessment, the European Commission concluded that Greece no longer suffers from Macroeconomic Imbalances, marking the country's removal from the corresponding monitoring framework for the first time since the Greek sovereign debt crisis began. The Greek Ministry of National Economy and Finance described the development as a landmark achievement, underscoring its strong symbolic value and its tangible significance for the country's economic progress.

According to the ministry, this development carries significant historical weight. Following the decade of bailout programs (2010–2018), the Enhanced Surveillance regime (2018–2022), Greece's prolonged placement in the category of Excessive Macroeconomic Imbalances during 2019–2024, and its inclusion in the category of Macroeconomic Imbalances in 2025, the country is now returning to full European normality. The ministry adds that the significance of this development is even greater when considering that ten European Union member states are currently subject to excessive deficit procedures. This highlights not only the significant improvement in Greece's fiscal position, but also the fact that the economy's external imbalances and structural weaknesses have now been reduced to a level that no longer constitutes a systemic risk to the country's economic stability.

According to the Ministry, Greece's exit from the Macroeconomic Imbalances framework, the maintenance of fiscal surpluses, the continued reduction of public debt, improvements in the labor market, sustained progress in structural reforms, and the effective utilization of European funding instruments together paint the picture of an economy that has definitively moved beyond the conditions of the crisis era. These achievements, the Ministry notes, reflect an economy that continues to advance on a path defined by stability, credibility, and resilience, while strengthening its foundations for sustainable long-term growth.

More specifically, the European Commission notes in its assessment that vulnerabilities related to public and external debt have declined significantly in recent years. It highlights that sustained economic growth, fiscal surpluses, stronger bank balance sheets, and the implementation of reforms have played a decisive role in reducing the risks that had characterized the Greek economy for many years.

The Commission further emphasizes that:

• public debt is on a steady downward trajectory;
• external imbalances have been substantially reduced;
• banks have significantly strengthened their balance sheets;
• labor market conditions have continued to improve; and
• Greece has implemented a broad range of reforms in the business environment, labor market, and tax administration.

Strong Growth Despite an Uncertain International Environment

The Greek economy expanded by 2.1% in 2025, despite a period of heightened uncertainty for both the European and global economies. The European Commission forecasts that growth will continue at a rate of 1.8% in 2026, compared with an average of 0.9% for the Eurozone, reaffirming the resilience of the Greek economy.

Fiscal Surpluses and Strong Fiscal Performance

Greece recorded a General Government surplus of 1.7% of GDP in 2025, up from 1.3% of GDP in 2024.

According to the European Commission, this performance was driven by:

• restraint in current public expenditure;
• lower debt-servicing costs; and
• stronger tax revenue collection.

Greece achieved this result while simultaneously implementing reductions in social security contributions, increasing public-sector wages, and introducing targeted support measures for households.

Continued Debt Reduction at the Fastest Pace in Europe

Greece continues to record the fastest pace of public debt reduction in Europe, further strengthening the sustainability of its public finances and enhancing confidence in the country's long-term economic outlook. The European 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); and
• 134.4% of GDP in 2027 (forecast).

In other words, Greece is expected to reduce its debt-to-GDP ratio by nearly 20 percentage points in just three years. According to the Commission, this improvement is being driven by strong nominal economic growth and the continued generation of fiscal surpluses.

Recognition of Reforms and the Digital Transformation

The report places particular emphasis on the reforms implemented in recent years, highlighting their contribution to strengthening the Greek economy and improving public sector efficiency. Specific reference is made to:

• the digitalization of tax administration;
• the digitalization of customs controls;
• the development of digital compliance tools;
• the significant reduction in the VAT gap; and
• the overall improvement in tax compliance.

The European Commission also underscores the substantial progress Greece has made in modernizing its public administration. At the same time, it notes that public-sector wage expenditure amounted to 10.2% of GDP in 2025, remaining broadly in line with the European Union average of 10.3%.

Above the EU Average in the Implementation of European Programs

The European Commission finds that the implementation of Cohesion Policy programmes in Greece is progressing at a faster pace than the European Union average, both in terms of project selection and the disbursement of funds. At the same time, the Commission acknowledges the significant contribution of the Recovery and Resilience Facility (RRF) in advancing investments and reforms that strengthen the competitiveness and resilience of the Greek economy. These developments underscore Greece's ability to effectively absorb and utilize European funding, supporting sustainable growth and accelerating the country's economic transformation.

(Source: https://www.amna.gr/)

OECD: Greek Economic Growth Remains Resilient

In its latest Economic Outlook, the OECD projects that the Greek economy will maintain strong growth momentum despite the uncertainty stemming from the crisis in the Middle East. Specifically, the OECD forecasts GDP growth of 1.9% in 2026 and 2.0% in 2027, broadly in line with the 2.1% growth recorded in 2025.

According to the report, investments will be supported by increased disbursements from the Recovery and Resilience Facility (RRF), which are expected to rise from 2.6% of GDP in 2025 to 4.4% of GDP in 2026. At the same time, consumption is projected to benefit from continued employment growth, reductions in personal income taxation, and measures aimed at mitigating the impact of the energy crisis, despite persistently elevated energy prices. The OECD also expects exports to strengthen gradually during the second half of 2026 as international demand improves.

(Source: https://www.amna.gr/)

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Greece has recorded the largest reduction in public debt among the EU’s 27 member states following the pandemic crisis, according to aggregated Eurostat data announced yesterday, confirming the steady downward trend of recent years.

“Greece is recording the fastest debt reduction in history,” emphasized Minister of National Economy Kyriakos Pierrakakis in a post on X. As Kyriakos Pierrakakis highlights, the rapid reduction of debt is a deliberate government choice, aimed at ensuring it is not passed on to the next generation.

Public debt-to-GDP ratio (Source: Eurostat, AMECO)

Due to extraordinary fiscal spending and the recession caused by Covid-19, Greek debt had risen in the first quarter of 2021 to 212.9% of GDP—more than double the European average, which at that time stood at 91.5%. However, by the end of 2025, the debt-to-GDP ratio had declined to 146.1%. This decrease—amounting to nearly 67 percentage points within four years—was achieved despite the pressures on the economy from the dual energy and supply crisis triggered by Russia’s invasion of Ukraine.

In practice, Greece’s debt-to-GDP ratio has returned to its most favorable levels since the summer of 2010, that is, since the launch of the first adjustment program. This outcome is attributed to prudent fiscal policy with the creation of primary surpluses, the early repayment of loans from the first bailout program and expensive IMF loans, as well as strong growth rates that boost GDP. During the same period, the European average improved by only 9.8 percentage points. As a result, the gap between Greece and the EU narrowed to 64.4 percentage points, compared to 121.4 points recorded at the beginning of 2021. The only country with comparable performance is Cyprus, which between 2021 and 2025 improved its debt-to-GDP ratio by 62.5 percentage points. On the other hand, eight member states saw their debt increase, while major economies such as Germany and France reduced their debt-to-GDP ratios by just 5.3 and 1.5 percentage points respectively, despite their traditionally lower borrowing costs.

It is noted that the structure of Greek debt remains favorable, as a large portion consists of support loans from previous programs, as also highlighted by the analysis of ELSTAT. The government’s economic team continues to target a further reduction of the debt, aiming for 140% of GDP by 2027 and 120% by 2030.

(Source: https://www.amna.gr, Cover photo: Shutterstock)

Valdis Dombrovskis, Commissioner for Economy and Productivity, and for Implementation and Simplification, https://x.com/VDombrovskis/status/2047262424554705205/photo/1

Daniel Kral - Oxford Economics, https://x.com/DanielKral1/status/2046961944570069296/photo/1

Daniel Kral - Oxford Economics, https://x.com/DanielKral1/status/2046961944570069296/photo/1

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