The European Union has announced that Greece is no longer breaking budget rules.

Wednesday’s recommendation from the EU Commission to end the so-called “excessive deficit procedure” on Greece comes after a sharp improvement in the country’s finances following years of spending cuts and tax increases, and a recession that wiped out a quarter of the economy and caused unemployment and poverty to swell.

“This is a very symbolic moment for Greece,” said Pierre Moscovici, the EU’s top economy official.

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“It’s the end of austerity, and the end of austerity means also we need to move to a strategy that’s based on growth, job creation and social fairness.”

Greece has been under the spotlight since 2009 when its debt crisis exploded in the wake of a statistics scandal that showed the public finances were in far worse shape than thought.

Greece’s budget deficit was suddenly revised upwards to double-digit levels and way above an EU limit of 3%.

Being put under the corrective procedure, Greece had to come up with a strategy to get its finances in order but as confidence in the country drained away, it found itself unable to borrow money in bond markets.

By May 2010, it required an international bailout to avoid going bankrupt and it has been reliant on rescue funds ever since.

In return for 300 billion euro over three bailout programmes, successive governments enacted waves of austerity measures and economic reforms.

Pierre MoscoviciEU Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici (right) syas the announcement is a “very symbolic moment for Greece.” (Geert Vanden Wijngaert/AP)

The turnaround in the government budget has been remarkable.

In 2016, Greece posted a surplus of 0.7% compared with the peak deficit of 15.1% in 2009.

Greece is hoping to exit its bailout era next year and is planning to start tapping bond markets, possibly in the next few months.

The recent release of 7.7 billion euro (£6.8 billion) of bailout funds means the country has enough money to pay upcoming debts and its budget surpluses will help it build up cash balances to pay them in the future.

The Greek government welcomed the move and said in a statement that it is “becoming clear that the Greek economy is steadily returning to European normality, restoring confidence lost because to the decisions made that had brought the country to the brink of collapse in 2010”.