By Prokopis Hatzinikolaou
Greece has recorded major progress in its absorption of European subsidies as well as in restructuring its tax administration but still laggs in terms of bank credit to enterprises, to say nothing of its failure to contain tax evasion, according to the seventh report of the European Commission’s Task Force for Greece, which was issued on Wednesday.
“You need to catch tax dodgers if you want to reduce your taxes,” a top Commission official said at the presentation of the report in Athens. “If tax administration had been more efficient, we could have reduced that tax burden,” he added.
The report praised the progress observed in tax administration, both in terms of organizational regulations and the main corporate procedures such as debt collection and the payment of value-added tax rebates. It also saw progress in checks related to illegal activities, with staff acquiring more skills and Task Force experts offering “guidance in the workplace.”
Another positive aspect is the operation of the bank account register, the report noted.
However the Task Force also underscored the problems in the real economy.
“The issue of loans to the real economy in Greece needs further improvement. The sector is still recording high levels of nonperforming loans, while the issuance of loans remains limited and is characterized by high requirements in guarantees and by high interest rates,” the report said.
A senior Commission official noted that lack of cash flow remains one of the key obstacles hindering the growth of the economy, as do bad loans, for which Greece has not asked the Task Force for any help. He added that there is a huge stock of international experience on this front that can be used.
On the absorption of European Union subsidies, the report praised Greece’s rise from 18th spot in the EU at the end of 2011 to fifth, having steadily improved its rate of absorption from the Structural Funds for the 2007-13 period.
Still, it warned of a possible “overcommitment of funds” for the next funding period (2014-20).