ocp192_en

1. INTRODUCTION1. INTRODUCTION1. This report provides an assessment of the progress made by Greece in respect of its SecondEconomic Adjustment Programme. It examines current macroeconomic, financial and fiscaldevelopments, and assesses compliance with the programme conditionality agreed between the GreekAuthorities and the European Commission (EC), ECB, and IMF, as set out in the Memorandum ofUnderstanding (see Box 1 and Annex 3). The assessment is based on the findings of a four-part jointEC/ECB/IMF mission to Athens between 16-29 September 2013, 28 October-8 November 2013, 2-15December 2013 and 24 February-17 March 2014, as well as the continued interaction with theauthorities, including through Commission and IMF staff based in Athens.2. The economic adjustment programme is supported with financing by euro area Member Statesand the IMF. The financing by the euro area Member States takes place through the EFSF, whilst theIMF financing is provided through the Extended-Fund Facility (EFF). Up to March 2014, theinternational assistance loans disbursed so far to Greece amount to EUR 214.9 billion. Of this amount,EUR 73.0 billion were disbursed within the first programme (EUR 52.9 billion have been paid by theeuro area Member States through the Greek Loan Facility and EUR 20.1 billion by the IMF). Within thesecond programme, the EFSF and the IMF have already disbursed EUR 141.9 billion in three releases(EUR 133.6 billion by the EFSF and EUR 8.3 billion by the IMF).3. The outline of the report is as follows. The second section examines macroeconomic and financialdevelopments in the Greek economy, including a detailed macroeconomic scenario. Section threeprovides the analysis of programme compliance and outlines the policy commitments up to 2017 thathave been agreed between the Greek Authorities and the Commission, ECB, and IMF staff teams.Comprehensive compliance tables, the macroeconomic forecast, and key programme documents areattached in Annex.Box 1. The documents for a comprehensive adjustment strategyThe Economic Adjustment Programme is spelled out in a series of key documents: (1) a Council decision; and a'Memorandum of Understanding' comprising (2) a 'Memorandum of Economic and Financial Policies' (hereafter MEFP), and(3) a 'Memorandum of Understanding on Specific Economic policy Conditionality' (hereafter MoU) see Annex 3. Thesedocuments outline the economic and financial policies that Greece commits to implement during the period of theprogramme (with a special focus on the remainder of the year and the two following years, in alignment with the annualbudget and the agreed fiscal measures).The EU Council decision 2011/734/EU, last amended by decision 2013/6/EU of 4 December 2012 based upon arecommendation of the European Commission, sets the steps and deadlines to be respected to correct the situation ofexcessive deficit. The MEFP and MoU are agreed between the Greek authorities and the Troika institutions (EC/ECB/IMF)on behalf of the lenders. They are subsequently implemented according to a pre-agreed timetable. The MEFP describes thebroader policies, while the MoU specifies in a more detailed manner specific measures. The programme documents are livingdocuments and are modified at every programme review, based on implementation of previous commitments andidentification of new ones. The first programme documents were agreed upon in May 2010.9