ECONOMY

Greece is Europe’s reform champ

For a second consecutive year, Greece is the champion of Europe in terms of reforms, according to a report by the Lisbon Council think tank presented on Tuesday in Brussels in the presence of European Commission Vice President Olli Rehn.

The report, titled “Euro Plus Monitor,” grades European countries using four indices: the adjustment of the current account balance, the fiscal adjustment, the labor cost adjustment, and reforms. In comparison with 2012, Greece is the leader among the 20 European countries the report monitors in terms of fiscal adjustment and reforms, it is second only to Ireland in the adjustment of labor costs and has achieved one of the best grades in external balance adjustment, emerging as the most efficiently adjusting country in Europe.

Figures relating to the fundamental health of the country’s economy have also shown the most impressive improvement of the 20 European states monitored, raising Greece from the bottom of the table – where it was last year – and above Italy, Portugal and Cyprus.

Besides Greece, the other countries currently in bailout programs are showing major progress too, with the most impressive improvement identified by the Lisbon Council in Cyprus. “The shrinking of the external and fiscal deficits in the countries that are in the bailout process means that they no longer live beyond their means. Contrary to what is being said about a ‘moral risk,’ the results of our research show that these countries have made huge efforts and deserve the assistance they are getting from the Support Mechanisms,” the reports states.

On Greece, the report notes that “80 percent of the fiscal adjustment has already been completed. With the short-term challenge of the fiscal adjustment having almost been dealt with, the long-term growth prospects of the country must now improve even further.”

However the report points to concern about the fact that the Greek external deficit has been reduced mostly thanks to the decline in imports and not so much through growth in exports.