Greece is finally putting a 16-year chapter behind it as the European Commission has decided to remove it from the list of countries with macroeconomic imbalances. The development marks the end of all forms of European surveillance at a time when ten eurozone member states are still under the excessive deficit procedure.
Both the European Commission and the OECD in their latest assessments paint a positive picture for the Greek economy, noting that it is maintaining strong growth rates despite international challenges and uncertainty caused by geopolitical tensions in the Middle East.
According to financial analysts, the conclusions of the two agencies further strengthen the country’s position in international markets, raising expectations for new credit rating upgrades by major agencies in the coming months.
Positive signals from the bond market
The progress of the Greek economy is also reflected in government bond yields. The Greek 10-year bond is hovering around 3.7%, lower than its Italian counterpart at 3.78%.
At the same time, the French 10-year bond is yielding around 3.6%, Spain’s 3.45% and Portugal’s 3.4%, while the UK’s has reached close to 4.9%.
At the same time, the French 10-year bond is yielding around 3.6%, Spain’s 3.45% and Portugal’s 3.4%, while the UK’s is close to 4.9%.
Investors are positive about the country’s fiscal performance, with particular emphasis on high primary surpluses. Maintaining this policy contributes to a faster decline in public debt and reinforces overall economic stability.
Different growth estimates
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Slight divergences appear in the two organisations’ projections for the coming years. The OECD estimates that the Greek economy will grow by 1.9% in 2026 and 2% in 2027. On the other hand, the Commission forecasts a growth rate of 1.8% in 2026 and 1.6% in 2027.
Differences aside, these forecasts remain significantly higher than those of the larger eurozone economies. Germany is expected to move to 0.6% this year and 0.9% next year, France to 0.8% and 1.1% respectively, while Italy is estimated to record growth of 0.5% this year and 0.6% in 2027.
Debt reduction continues
The outlook is also particularly positive for the path of public debt. The OECD estimates that debt as a percentage of GDP will be reduced to 135.8% this year, down from 146.5% last year, and is forecast to fall to 129.8% by 2027.
The European Commission appears slightly more conservative, predicting the ratio will be 140.7% this year and 134.4% in 2027.
The European Commission is slightly more conservative, predicting the ratio will be 140.7% this year and 134.4% in 2027.
In contrast, in other major European economies the trend remains upward or at high levels. In Italy debt is expected to rise from 138.5% this year to 139.2% in 2027, while in France it is estimated to rise from 118.1% to 120.9%. In Germany, the corresponding ratio is projected to move from 65.8% this year to 68% in 2027.
