What reforms do international organizations and houses expect from Greece?

By Tasos Dasopoulos

Fewer in number, but greater in difficulty, are the reforms that international organizations, rating agencies and markets are waiting for to raise the rating above the minimum investment grade.

The first guarantee for everyone, that Greece is moving in the right direction, will be the full and proper utilization of the 36 billion that the country has secured from the Recovery and Resilience Fund until the middle of 2026. This is because through the national program “Greece 2.0.” a total of 103 investments and 76 reforms will be financed. At the same time, despite the categorical denials on behalf of the European Commission, that there may be room for an extension in the implementation of the Recovery Fund after August 2026, the rating agencies are expecting some kind of extension. This, given that apart from Greece, Italy, Spain and Portugal which are in the first positions in absorbing resources, many EU member states are still far behind in their own programmes.

The immediate demand mainly for the rating agencies is the completion of the consolidation and the privatization of the Greek banking system which, as pointed out by S&P and previously other rating agencies and the European Commission, is showing delays. In this context, the further reduction of bad loans, the liquidation of deferred taxation and the formation of the 5th banking pillar are urgent, in order to strengthen domestic competition. As S&P emphasized in its evaluation, which on Friday upgraded the outlook of the Greek economy from “stable” to “positive”, the full restoration of commercial banks – especially the non-systemic ones – is a key point for a smoother course of the economy in which is still delayed.

Also, a positive sign would be the achievement of the goal of collecting 5.2 billion euros from privatizations of highways and ports that have either taken place or are on the horizon.

Improving the administration of justice

The delay in the delivery of justice is another critical reform, the delay of which keeps Greece low in the rankings of its competitiveness as an investment destination. Ratings agencies and international organizations expect the reform to speed up the administration of justice, which began to be phased in from 2022 and led to the unloading of courts this year with incentives for out-of-court dispute resolution, to proceed and be completed for most of within 2024.

Digitization of tax procedures

Those who closely follow the course of the Greek economy, expect the completion of the digitization of the procedures and transactions of taxpayers with the authorities to be completed within time. In the direction of greater tax compliance, they expect the results from the increase in electronic transactions, but also the interconnection of automatic payment machines (POS) with cash registers in order to further limit the loss of taxes and especially VAT.

Other reforms

The Greek authorities have informed all kinds of supervisors of the Greek Economy about a series of other reforms that are underway, such as the upgrade of primary care, the introduction of the digital patient card and the upgrade of the procedures for the utilization of public property. Also, the completion of the land registry is considered key to attracting new investments.

Also, reforms have been announced regarding the strengthening of the competition of the internal market of products and services, in an effort to normalize prices on a more permanent basis. And these reforms have been noted and expected by international economic watchdogs.