Regling: ESM emerged stronger from pandemic crisis; extensive references to Greece in annual report

European Stability Mechanism (ESM) Managing Director Klaus Regling on Thursday unveiled the eurozone emergency fund’s annual report for 2020, where he stressed that the organization emerged stronger and more resilient from the pandemic-battered period, and better prepared to face future challenges in the euro area’s credit stability.

The annual report, as expected, was approved by the ESM’s board of directors.

The report also referred, in detail, to Greece’s economic and financial state, and the ESM’s relationship with the thrice bailed-out eurozone member, factoring in and scrutinizing the repercussions of the pandemic in the country.

Among others, the report noted that the pandemic interrupted a three-year economic recovery and led to a “sizeable general government deficit for the first time since 2015.”

“GDP fell sharply, mainly stemming from the drop in tourism and the measures to contain the spread of Covid-19. The recession and tailored aid measures pushed the budget into large deficits. Favourable market conditions, supported by the ECB programmes and the Next Generation EU recovery plan, enabled the country to cover the elevated financing needs and maintain high cash balances. Greek banks have so far weathered the impact of the pandemic and provided an increasing amount of loans to firms, largely thanks to supervisory flexibility and national support schemes.”

The entire report can be read here .