ECONOMY

Positive message from the OECD

With the message ?Greece, you can,? the head of the Organization for Economic Cooperation and Development (OECD), Angel Gurria, in Athens on Tuesday praised government efforts to deal with Greece?s economic crisis and attempted to bolster the country?s resolve to keep going with the necessary measures set to come in the next 20 years.

That, after all, is the time frame during which OECD technocrats expect the country?s debt to drop to the 60 percent level of gross domestic product required by the European Union?s Stability Pact and it will require strict measures that will allow for a gradual return to the markets and to growth.

Gurria was presenting an OECD report that Finance Minister Evangelos Venizelos described as the most positive of the last few years. It acknowledged the government?s efforts to date toward streamlining its finances, along with the reforms of the last few months, but without disregarding the problems and the new measures that must be taken for the program to cut the public debt to succeed.

The report contains four scenarios regarding the reduction of the public debt. The first, the most rational, leads to its reduction to below 60 percent of GDP by 2035 and requires the implementation of the privatization program to the amount of 50 billion euros, while combined with a strong growth plan it could take the debt down to 37.7 percent.

Failing to implement the privatization plan to any more than 15 billion euros for the period to 2017 could keep the debt at 98 percent, or around 71 percent, on the condition that the structural reforms are successfully implemented and the target for primary surpluses is met.

The OECD has focused its recommendations on the effort to contain tax evasion and apply the tax reforms through the reduction of the tax-free ceiling, which is considered high, and the application of tough measures for tax dodgers. It proposes that the ceiling for the publication of the names of evaders be brought down from 150,000 to 15,000-17,000 euros, and the reduction of value-added tax brackets by abolishing the 7 percent one.

It also calls for geographical restrictions to lawyers and fixed profit margins for pharmacists to be abolished and for greater liberalization of the labor market.