EU auditors launch audit of countries under surveillance after previous financial crisis
Share article:
Share article:

EU auditors launch audit of countries under surveillance after previous financial crisis

Credit: ECA

The European Court of Auditors (ECA) announced last week that it will examine the post-programme surveillance for Ireland, Portugal, Spain, Cyprus and Greece. The five countries received financial support after the 2008 financial crisis.

All EU member states are normally subject to a standard surveillance under the so-called European Semester, a cycle of economic and fiscal policy coordination within the EU. If, however, a member state experiences serious financial difficulties, it can apply for a financial assistance programme. After the 2008 financial crisis, this was the case for Ireland, Portugal, Spain, Cyprus and Greece.

After exiting a financial assistance programme, a euro area member state is placed under post-programme surveillance or enhanced post surveillance (PPS), as in the case of Greece. The aim of PPS, which is implemented alongside the European Semester, is to ensure that member states are able to repay the financial assistance granted.

“Now that the global economy is being severely impacted by the COVID-19 pandemic, it is important to know if the pillars of the EU’s economic and financial architecture are solid and effective”, said Alex Brenninkmeijer, the ECA member responsible for the audit and a former Ombudsman of the Netherlands (20 August).

“Our audit will also consider the suitability of post-programme surveillance as a monitoring tool for the economic recovery fund currently under discussion,” he added.

The purpose of the audit is to examine the design, implementation and effectiveness of the Commission’s post-programme surveillance for the five member states concerned. The audit – due for completion by mid-2021 – will look in particular at whether the Commission’s work provided creditors with assurance regarding member states’ repayment capacity.

According to ECA’s preview describing the planned audit, the minimum initial surveillance period following exit from the financial assistance programme is the time needed to repay 75 % of the loans, but this can change due to early repayments or further restructuring. Current repayment periods vary wildly, ranging from 2027 (Spain), to 2031 (Cyprus), 2040 (Portugal), 2042 (Ireland) until 2070 (Greece).

Greece alone received €376 billion or two thirds of the total financial assistance to the five countries. With a government debt to GDP ratio of 177 % in 2019 – higher when it started to receive the loans – it is one of the most indebted countries in the world. The average debt ratio in the euro area is 84 % according to Eurostat.

The Brussels Times asked ECA about the chances that Greece with its huge debt will be able to repay the loans. “Information is necessarily limited at this stage,” the auditors replied and declined to clarify if debt relief or cancellation will be included in scope of the audit.

The audit takes place in the middle of a new economic crisis due to the coronavirus pandemic. How will that influence the audit and its conclusions? “As far as possible, the audit will take account of the impact of the pandemic on the Commission’s assessment of member states’ public finances and their repayment capacity,” the auditors ensured.

M. Apelblat
The Brussels Times

Latest news

More women take police selection tests in Belgium
The selection tests to become a police inspector have more and more female participants, according to figures released by Interior Affairs Minister ...
‘Absurd’: all Brussels schools should have the same Covid rules
Several city councillors for education in Brussels are calling to abolish the "absurd" differences in coronavirus measures for Dutch-speaking and ...
Massive renovations for iconic venue in the heart of Brussels
Brussels concert hall Ancienne Belgique has announced plans to renovate the AB Café and the AB Salon and is looking for a contractor fit for the job. ...
Display of child’s room in Brussels raises awareness of foster families
An exhibit that features a fictitious child’s bedroom has been on display since Tuesday at the Place d'Armes in Namur, with the support of the ...
Test results show pupils have fallen behind in Flemish schools
Learning delays have been reported in almost all subject areas in Flanders since the start of the pandemic, a trend that continued in 2021, a ...
Belgium considers relaxing testing rules for UK travellers
At the next Consultative Committee meeting, Belgium will look into relaxing the testing and entry policy for travellers coming from the United ...
Jette libraries start giving plants away with books
Visitors to libraries in the Brussels municipality of Jette will soon be able to pick up a free plant along with a book, thanks to the new Plantotek ...
‘Do what you want, but do it as safely as possible,’ experts warn
As the daily number of new coronavirus infections exceeds 3,000 for the first time since May, infectious disease expert Erika Vlieghe and ...
‘We’re running dry’: Brussels teacher shortage reaches critical levels
The teacher shortage in Brussels is affecting schools across language borders, according to Brussels’ Minister for Multilingualism and Dutch ...
New coronavirus infections above 3,000 for first time since May
The number of people testing positive for coronavirus has skyrocketed to the highest rate since the start of May 2021. Between 9 and 15 October, ...
Belgium in Brief: Getting To The Airport
When I saw the news of plans for a tram line and cycle path to connect Brussels' outskirts to the airport, my first reaction was sheer joy.  Let ...
EU should invest €5 trillion in climate plan, says State Secretary for Economic Recovery
The European Union must invest €5 trillion in its climate plan over the next decade to "retain its credibility as a political project," according ...