Greece’s removal from the list of OECD countries (OECD) regarding various issues—primarily structural ones—Greece’s removal from the list of EU countries with macroeconomic imbalances was accompanied by
The European Commission and the OECD, while commending the country for its fiscal performance in recent years, highlight the vulnerabilities and weaknesses of the domestic economy, placing the issue of tax exemptions, excise taxes on diesel, and the large debts of hospitals.
The two organizations state that many tax exemptions should be reviewed, not only because of their cost to the budget, but also because of their social impact.
Currently, there are 1,236 tax exemptions, costing the budget approximately 22.9 billion euros. These are special provisions that directly or indirectly reduce tax revenue and provide for exemptions, reductions, deductions, reduced rates, and deferrals of tax obligations.
The Commission and the OECD do not argue that every tax exemption is necessarily wrong, but they identify the problem primarily in the lack of systematic evaluation, which leads to unequal treatment among taxpayers and deprives the budget of significant resources.
Specifically, the OECD notes that “reducing tax expenditures and continuing measures to combat tax evasion would create additional fiscal space,” while the Commission calls for the evaluation and rationalization of 1,236 tax exemptions with a significant fiscal burden.
In the past, the OECD has emphasized that numerous tax expenditures, particularly reduced rates and VAT exemptions, reduce public revenue, while evidence of their effectiveness is weak. The key issue, as it turns out, is not a blanket abolition, but their evaluation: which exemptions actually help, which disproportionately benefit specific groups, and which can be reduced to broaden the tax base without raising rates.
It is worth noting that the same recommendation has recently been expressed by both the International Monetary Fund and the Governor of the Bank of Greece, Yannis Stournaras, while the Foundation for Economic and Industrial Research (IOBE) noted in a recent analysis the need to reexamine the scope and cost of tax exemptions, warning that their continuous expansion limits tax revenues and increases the complexity of the tax system.
The trend in tax exemptions over the past few years has been steadily upward. In 2014, amid the memoranda, they amounted to €3.042 billion, rising to €7.716 billion in 2017. With the exception of the pandemic period, they have been increasing and multiplying since 2021, reaching nearly €22.9 billion today.
Diesel taxes
According to the European Commission, Greece remains the EU country where excise taxes on diesel fuel remain particularly low compared to those on gasoline, even though diesel is more harmful to the environment.
“Therefore, a reform of energy taxation, combined with the gradual phasing out of subsidies on fossil fuels, could create stronger incentives for electric mobility and, more broadly, the electrification of the economy.
Meanwhile, a more targeted use of revenue sources (such as the ETS—the Emissions Trading System) would allow for the allocation of sufficient resources to key support schemes (such as the RES account), while simultaneously promoting the decarbonization of industry and transportation, further contributing to Greece’s green transition in a fair and socially inclusive manner,” it notes.
It should be noted that the excise tax on diesel fuel in Greece amounts to 0.41 euros per liter (or 410 euros per 1,000 liters).
In contrast to gasoline (where Greece has the 4th highest excise tax in the EU, at 0.70 euros/liter), for diesel our country is close to the European average, ranking approximately 13th among the 27 member states.
Greece, at €0.41 per liter, is slightly below the EU average.
Hospitals’ “debt”
Brussels has sounded another “alarm bell” regarding hospitals’ “debts” to suppliers, which remain consistently above 1.5 billion euros, rather than being reduced as our country has committed to its lenders.
The problem is not a cash flow issue—as relevant sources at the General Accounting Office of the State emphasize —since the relevant funds are available and are being disbursed according to plan, but payments are stalling at the agencies burdened with debt.
In one of the accompanying reports to the European Semester assessment, the Commission notes first that the total amount of net public sector arrears decreased in the second half of 2025, from €626 million in July to €453 million in December (approximately -28%), but annual progress remains modest (approximately -3%).
Most notably, European technocrats observe that developments across individual sectors are uneven. Social security funds show some improvement, which mainly reflects the continued reduction in arrears of lump-sum pension payments, while arrears in the central government, extra-budgetary funds, local authorities, and tax refunds have remained broadly stable.
On the other hand, hospitals remain the main source of concern, as arrears do not show a clear downward trend despite the reforms that have been undertaken.
The establishment of the Central Health Procurement Authority (EKAPY) has not yet yielded the expected results. As the Commission notes, according to the Greek authorities, this reflects a funding gap linked to a time lag between spending on medicines and the corresponding disbursement of grants to EKAPY.
The latest available data for the General Government show that the government’s gross arrears stood at €3.103 billion in March 2026, compared to €2.577 billion in December 2025. Of this debt stock, €1.590 billion is attributed to hospitals, while another €199 million is attributed to EOPYY.
The footnote from the General Accounting Office (GAO) states that the outstanding amounts for EOPYY and hospitals show gross amounts, and there is an obligation on the part of suppliers for rebates and clawbacks, which has not yet been offset.
* See the Commission’s report in the “Related Materials” column.