ECONOMY

EC sees ‘important progress’ in Greece but identifies weaknesses as well

Greece has progressed with its fiscal and structural reform but is still displaying weaknesses in several areas, according to the European Commission’s report on the third review of the country’s second bailout program.

“Important progress has been made on public finances and the recapitalization of the four core banks has been completed,» the Commission said, «The legal basis for the new semi-autonomous revenue administration has been created, but perseverance in implementing the ongoing reforms will be key to deliver concrete results in the fight against tax evasion.”

Brussels gave an indication in which Greece needed to make greater effort.

“Several important structural reforms have been implemented in the areas of healthcare, the opening of professions, and public financial management,» said the Commission’s report. «However, far-reaching reforms are still needed in many other areas, including public administration reform, improvements of the business environment, energy and justice.”

The EC outlined several areas that Greece must pay more attention to. These include healthcare spending, tax administration, reducing state arrears and advancing its privatization program. The privatization target for this year has been reduced from 2.6 to 1.6 billion euros after the failure to sell gas firm DEPA. But next year’s target has been increased from 1.9 billion to 3.5 billion euros.

Brussels also said that it believes Greece is on course to see some growth next year after «a gradual bottoming out of the decline in economic activity» and «deceleration» in the contraction of employment this year. The Commission expects GDP to shrink by 4.2 percent this year and to rise by 0.6 percent in 2014. According to EC experts, growth will reach 2.9 percent in 2015 and 3.7 percent in 2016.

The report was published shortly after the German parliament’s budget committee approved a release of new loans for Greece. Athens is to receive 2.5 billion euros in fresh financing from the eurozone on Monday and 1.8 billion euros from the International Monetary Fund on Wednesday.

“Greece made things exciting again in the past few days,» said Christian Democrat committee member Norbert Barthle in reference to the rush last week to meet the «prior actions» set by the troika.