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Athens Macedonian News Agency: News in English, 13-05-18

Athens News Agency: News in English Directory - Previous Article - Next Article

From: The Athens News Agency at <>


  • [01] Commission: Greece to begin recovering in 2014, more effort needed

  • [01] Commission: Greece to begin recovering in 2014, more effort needed

    ANA-MPA -- Greece has made significant progress in implementing a second economic adjustment programme and has the prospect of returning gradually to economic growth in 2014, the European Commission said on Friday.

    In a report, released here, over the outcome of a second assessment of the Greek memorandum -made by the EC-ECB-IMF troika in the period February 27- April 11- the Commission noted that the country's public finances were steadily improving, a bank recapitalization plan has made significant progress while significant structural reforms were being implemented. The 247-page report, however, stressed that more efforts were needed particularly in the civil administration and taxation sectors.

    The EU's executive said it expected a moderate recovery from 2014, based on improving investments and exports, with the country's GDP rising by 0.6 pct next year, a growth rate expected to accelerate from 2015 onwards.

    The European Commission said that Greece achieved more than expected in cutting its fiscal deficit last year, with primary deficit falling to -1.3 pct of GDP and the fiscal deficit falling to 6.3 pct of GDP from 9.4 pct in 2011. The report noted that the country's fiscal effort was even greater if a deep economic recession was taken into account.

    The report said that the troika and Greek authorities have agreed on the package of measures necessary to avoid any gaps in the state budget in 2013 and 2014 and said that the biggest part of this fiscal effort for the two-year period has already been implemented.

    However, fiscal prospects after 2014 remained uncertain, largely depending on tax revenues. The report said that the country's fiscal gap was estimated at 1.7 pct of GDP in 2015 and 2.1 pct of GDP in 2016. These gaps must be taken into account during the next round of negotiations for the 2014 budget this autumn.

    Commenting on a tax reform effort, the Commission said that a new legislation was expanding the tax basis and equally distributed the tax burden. The report said it expected a new tax reform to raise net revenues of 2.0 billion euros in 2014, but noted that a lot of work still needed to be done on tax collection.

    The report said that privatizations were not progressing satisfactorily, although it acknowledged progress made in the preparation of state assets due to be privatized.

    It also said that more reforms were needed in the civil administration to become more efficient and stressed that progress was made in cutting the number of public sector workers. It added that Greek authorities have pledged to speed up significant delays in reforming the public sector, and to introduce a worker mobilization programme -covering 37,500 employees- this year.

    The Commission said that extended reforms in the labor market in 2012 was bearing results both in wages flexibility and improving competitiveness. The report noted that Greece was rapidly regaining its competitiveness but price adjustment was inadequate. The Commission said that reforms in the product and services market were crucial to boost investments, innovation and competitions, while it noted that a smooth completion of a bank recapitalization process was a top priority.

    The report said that the country's public debt was expected to begin falling from 2014 onwards falling to 120 pct of GDP in 2021.

    Finally, the report said that risks in implementing the programme remained big. These risks were related to vested interests, and a slow economic growth in the Eurozone. The Commission said that repayment of outstanding debt of the state to the private sector, a more dynamic tourist season and a restart of large projects, such as national roads, will have a positive impact on the economy.

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