The Council of the European Union has adopted a recommendation on 3 July 2026 urging Greece to adhere to specific fiscal, structural, and reform policies, including respecting net expenditure growth limits and addressing macroeconomic vulnerabilities. The recommendation affects all Greek citizens and institutions by setting binding fiscal targets and reform expectations.
The document, issued by the Council, outlines net expenditure growth rates for Greece: 3.6% in 2026, 3.1% in 2027, and 3.0% in 2028, cumulatively reaching 10.3% by 2026, 13.7% by 2027, and 17.1% by 2028 from a 2023 base. A national escape clause activated for 2025-2028 allows deviation for defence spending; Greece's projected 2026 net expenditure growth of 7.3% exceeds the recommended 3.6% but falls within the clause's flexibility. The Council notes that Greece is no longer experiencing macroeconomic imbalances as of 3 June 2026, with government debt declining from 154.2% of GDP at end-2024 to 146.1% at end-2025, projected at 140.7% by end-2026 and 134.4% by end-2027. The general government surplus stood at 1.7% of GDP in 2025, projected at 0.8% in 2026 and 0.6% in 2027. Defence expenditure is projected at 2.6% of GDP in 2026, up from 2.4% in 2025. Energy support measures, including a diesel subsidy of EUR 0.16 per litre, fuel pass of EUR 50-60 per vehicle, and fertiliser subsidy covering 15% of costs, cost 0.2% of GDP in 2026; if extended to end-2026, the cost would rise to 0.6% of GDP.
evaluate and rationalise 1,236 tax expenditures, complete customs centralisation at the Port of Piraeus, apply a unified wage grid and maintain staffing levels, adopt a codified law for multi-level governance framework (expected 2026), accelerate resolution of non-performing loans and pre- and post-auction disputes, and reduce regulatory burden and entry barriers.
Stakeholder impact Greek taxpayers face continued fiscal discipline with limited room for tax cuts or spending increases, though defence spending flexibility may ease pressure. Greek businesses benefit from reduced regulatory burden and entry barriers, potentially improving competitiveness, but may face adjustment costs from customs centralisation and tax expenditure rationalisation. Greek public administration must implement reforms including a unified wage grid and multi-level governance codification, requiring administrative capacity. The Greek government gains flexibility for defence spending under the escape clause but must maintain fiscal surpluses and debt reduction, balancing security needs with fiscal prudence.
Institutional follow-up The recommendation is non-binding but forms part of the European Semester framework. The Council will monitor Greece's compliance through annual country-specific recommendations and the Stability and Growth Pact procedures. The European Commission is expected to assess progress in its autumn 2026 country report.