By Dimitra Manifava
Greece remains the best-performing country in the eurozone as far as adjustment to structural reforms is concerned, according to the updated “Euro Plus Monitor” report issued on Thursday by the Lisbon Council and Berenberg Bank.
The countries of the so-called European periphery in general remain right at the top of the chart drafted in the context of the report, which praises their “impressive progress.”
The Lisbon Council for Economic Competitiveness and Social Renewal – which is a think tank and a policy network – and Germany’s Berenberg Bank estimate that the end of the crisis is near and any further fiscal measures in Greece, Ireland, Portugal and Spain should be limited, while in Italy they do not consider any measures to be necessary. They go as far as to recommend that eurozone economic policy-makers stop asking countries that due to an unforeseeably deep recession have not met their fiscal targets to take measures beyond those agreed.
On a 0-10 scale, with 0 being the worst performance and 10 the best, Greece has the highest overall grade of 8.2, just as in the previous report issued in November. In terms of specific criteria, this country also has the highest mark in terms of fiscal adjustment, 8.7, as it suffered the greatest pressure and therefore faces the worst recession, the report notes.
Regarding external adjustment (the shift in the balance of exports and imports, along with the rise in the share of exports in a country’s GDP), Greece gets 6.6, which is the fifth highest in the eurozone, with the report underscoring that during the October-December 2012 period, Greece increased its exports to third countries by 30.4 percent compared with the same quarter in 2011.
Greece scores 7.4 for labor costs, while its record in the rapid promotion of structural reforms (based on data supplied by the Organization for Economic Cooperation and Development) gets full marks.
The report adds that the eurozone in general will require greater labor market flexibility to bolster its competitiveness, and that the bloc will need to take initiatives to safeguard the future of the euro as a strong currency. Concern is also expressed about France, whose performance remains below the eurozone average and is worse than that recorded in the previous report in November 2012.