A significant development for the Greek economy is outlined in the European Commission’s communication as part of the 2026 European Semester.
The Commission notes that Greece no longer faces Macroeconomic Imbalances, removing the country from the relevant monitoring category for the first time since the outbreak of the Greek debt crisis.
Following the decade of the memoranda (2010–2018), the Enhanced Surveillance regime (2018–2022), Greece’s prolonged placement in the Excessive Macroeconomic Imbalances (Excessive Macroeconomic Imbalances) during the 2019-2024 period, and its inclusion in the Macroeconomic Imbalances category in 2025, the country is now returning to full European normality.
According to the announcement by the Ministry of National Economy and Finance, “the significance of this development is even greater when one considers that it is taking place at a time when ten European Union member states are in the excessive deficit procedure, a fact that highlights not only the spectacular improvement in the fiscal position but also the fact that the economy’s external imbalances and structural weaknesses have now been reduced to a degree that they no longer pose a systemic risk to the country’s economic stability.”
The European Commission acknowledges the progress of the Greek economy
In its assessment, the European Commission notes that vulnerabilities related to public and external debt have declined significantly in recent years.
As noted, steady growth, budget surpluses, improved bank balance sheets, and the implementation of reforms have played a decisive role in reducing the risks that have characterized the Greek economy for many years.
The Commission emphasizes that:
- public debt is on a steady downward trajectory,
- external imbalances have been reduced,
- banks have significantly strengthened their balance sheets,
- the labor market has improved further,
- and the country has implemented a wide range of reforms in the business environment, the labor market, and tax administration.
Strong growth despite the uncertain international environment
The Greek economy grew by 2.1% in 2025, amid a climate of intense uncertainty for the European and global economies.
The European Commission forecasts that growth will continue at a rate of 1.8% in 2026, compared to the Eurozone average of 0.9%, confirming 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, compared to 1.3% of GDP in 2024.
According to the Commission, this performance was achieved thanks to:
- contain current expenditures,
- reduced debt service costs,
- and increased tax revenue collection.
Greece achieved this performance alongside reductions in social security contributions, wage increases in the public sector, and targeted measures to support households.
Europe’s fastest debt reduction continues
The European Commission notes a further significant reduction in public debt:
- 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)
Over the next three years, Greece is projected to reduce its debt-to-GDP ratio by nearly 20 percentage points.
The Commission attributes this development to strong nominal economic growth and the maintenance of budget surpluses.
Recognition of reforms and the digital transition
The report places particular emphasis on the reforms implemented in recent years.
Specific mention is made of:
- the digitization of tax administration,
- the digitization of customs controls,
- the development of digital compliance tools,
- a significant reduction in the VAT gap,
- as well as the overall strengthening of tax compliance.
The Commission also emphasizes that Greece has made significant progress in modernizing public administration, while noting that public sector wage costs stood at 10.2% of GDP in 2025, remaining close to the European Union average (10.3%).
Above the European average in the implementation of European programs
The European Commission notes that the implementation of Cohesion Policy programs in Greece is progressing at a faster pace than the European Union average, both in terms of project selection and payments.
At the same time, the significant contribution of the Recovery and Resilience Facility to promoting investments and reforms that strengthen the economy’s competitiveness and resilience is recognized.
Another milestone in the country’s journey
“Today’s decision by the European Commission is one of the most significant institutional recognitions of the progress Greece has achieved in recent years,” emphasizes the Ministry of National Economy and Finance
“Exiting the Macroeconomic Imbalances regime, maintaining fiscal surpluses, the ongoing reduction of public debt, improvements in the labor market, progress on reforms, and the robust utilization of European funding instruments paint a picture of an economy that has definitively left the hallmarks of the crisis behind and continues on its path with stability, credibility, and resilience,” the statement concludes.
New European initiative for investments in energy security
The European Commission also announced the possibility of extending the scope of the existing National Escape Clause to include, under specific conditions, expenditures and investments that strengthen energy security and reduce dependence on imported fossil fuels.
In this context, a specific annual cap of 0.3% of GDP is envisaged for the period 2026–2028 and a cumulative cap of 0.6% of GDP for energy resilience investments, within the overall flexibility framework already established for defense.
This initiative creates additional opportunities to accelerate strategic investments funded by national resources in critical sectors such as energy, related infrastructure, and resilience, while expanding the scope for utilizing available fiscal capacity within the framework of European rules.