ABOUT THE AUDIT
The auditors examined whether the European Commission’s management of the three Economic
Adjustment Programmes for Greece was appropriate. In particular, they assessed how the Commission had handled the first two Programmes and designed the third. The auditors also attempted to assess the role of the European Central Bank (ECB) in the Programmes.
The report is expected to acknowledge the contribution of the programmes’ design to making the progress of reform in Greece possible, but also to identify weaknesses. The auditors are expected to make a series of recommendations to the Commission for future support programmes.
The global financial crisis prompted an economic downturn and a debt crisis in Europe. Countries with macroeconomic imbalances and structural weaknesses faced great difficulties. Greece had benefitted from an economic boom after joining the euro, fuelled by easy access to borrowing and generous fiscal policy. However, the crisis exposed the country’s vulnerabilities, and by April 2010, Greece could no longer viably finance itself on the financial markets. The country requested financial assistance from the euro area member states and the International Monetary Fund.
From 2010 onwards, Greece participated in three Economic Adjustment Programmes, designed in collaboration with the Commission, the ECB and the IMF. The third programme also involved the European Stability Mechanism. Assistance was subject to policy conditions, set by agreement between the Greek authorities and the lenders.
The first Economic Adjustment Programme was for €110 billion in 2010, with two further Programmes for €172.6 billion in 2012 and €86 billion in 2015. The Programmes were aimed at establishing a stable economic situation in Greece by covering the economy’s financing needs in return for wide-ranging structural reforms, thereby preventing contagion across the rest of the euro area.
The ECA’s special reports set out the results of its audits of EU policies and programmes or management topics related to specific budgetary areas. The ECA selects and designs these audit tasks for maximum impact by considering the risks to performance or compliance, the level of income or spending involved, forthcoming developments and political and public interest.