Eurogroup to acknowledge Greek programme delays and discuss 2016 budget

The Eurogroup will discuss two main topics, Greece and the preparation of the annual budgetary surveillance programme. On Greece, the Eurogroup is likely to acknowledge the delays of the first review of the Greek programme (for at least a few weeks but potentially until year-end). 

"The Greek government was expected to adopt a few measures by September (pension reform, the doubling of taxation on farmers (from 13% to 26%), the €50bn privatisation fund, the implementation of liberalisation measures on several product markets) in order to begin the first review in October but couldn't deliver because of the snap elections", says Soceite Generale.

The Eurogroup is set to put pressure on the government, seeking that these measures are adopted by mid-October. On the fiscal development front, the second steps of the European Semester, and one of the more important ones, will start by mid-October when the EU Commission begins to review the euro-area Member States 2016 Draft Budget Bills. 

Last year, the new Commission found eleven countries broadly compliant or at risk of non-compliance and hence asked them to take corrective measures. In particular, France, Italy and Belgium were put under further surveillance, with a review of their budgets in March 2015. 

"A few countries (Spain, France and Italy in particular) have already unveiled their budgets for 2016. Looking into the details, Italy was found that it might be at risk of being sent a request for corrective measures, in particular regarding the expenditure rule, while the Spanish structural budget balance reduction appears below the EU recommendation", added Societe Generale.