ECONOMY

Brussels warns of funding halt

BRUSSELS – The European Commission issued a clear warning to Athens on Wednesday in its Economic Report on the policy Greece should follow in the next year, saying it would need to apply the financial agreement to the full and improve its reform performance, or else there will be no more funding for the country.

?Greece should implement the measures described in the Memorandum signed on March 14, 2012. The integrated financial assistance by the international community may continue only provided that the implementation [of the Memorandum] improves,? the report states.

Asked whether Greece?s timetable could be made more flexible, as in Spain?s case, the European Union?s Economic and Monetary Affairs Commissioner Olli Rehn said in the press conference after the report?s publication, ?In Greece?s case we should all remember that a few weeks ago the second economic adjustment program was adopted, providing for the extension for the achievement of the fiscal targets from 2013 to 2015.?

The Commission report paints a dramatic picture of the situation in Greece, noting that the country has failed to stick to its commitments in key sectors: ?The progress registered in the tax system reform and in the improvement of the tax collection mechanisms is insufficient.? The report adds that ?a simpler and investment-friendly? tax bill should have been voted through last September.

It further points out that the implementation of the measures passed to combat tax evasion has been limited, and singles out specific areas that have not shown the progress required by the bailout agreement, placing part of the blame on political uncertainty.

It also expects the Greek economy to contract by an estimated 4.75 percent this year.