Greece’s budget approved by EU after eight years

BRUSSELS — After eight years of toil by the Greek people, the European Union’s executive arm is recommending that Greece be taken off its list of budget offenders, a move it hopes will help the country to start tapping financial markets for money soon.

Wednesday’s proposal from the EU Commission to end the so-called “excessive deficit procedure” on Greece comes after a sharp improvement in the country’s finances following years of spending cuts and tax increases and a recession that wiped out a quarter of the economy and caused unemployment and poverty to swell.

“This is a very symbolic moment for Greece,” said Pierre Moscovici, the EU’S top economy official. “It’s the end of austerity, and the end of austerity means also we need to move to a strategy that’s based on growth, job creation and social fairness.”

Greece has been under the spotlight since 2009 when its debt crisis exploded in the wake of a statistics scandal that showed the public finances were in far worse shape than thought. Greece’s budget deficit was suddenly revised upward to double-digit levels and way above an EU limit of 3 percent.

Being put under the corrective procedure, Greece had to come up with a strategy to get its finances in order but as confidence in the country drained away, it found itself unable to borrow money in bond markets. By May 2010, it required an international bailout to avoid going bankrupt and it’s been reliant on rescue funds ever since. In return for $340 billion over three bailout programs, successive governments enacted waves of austerity measures and economic reforms.

The turnaround in the government budget has been remarkable. In 2016, Greece posted a surplus of 0.7 percent compared with the peak deficit of 15.1 percent in 2009.