ECONOMY

Brussels sees scope for more reforms

Greece has made a notable effort to implement its reforms, according to a European Commission report published on Monday on the course of reforms in Greece, Italy, Spain and Portugal.

At the same time, the new electronic register for firms, the simplification of the process to start a business and the introduction of a system where it costs just 1 euro to start a company are the main reasons behind Greece’s 110-position rise in the World Bank’s “Doing Business” chart, to 36th place for 2013. This was the biggest improvement by any country in the world from 2012 to 2013.

The Commission report notes that there has also been progress in the liberalization of so-called closed-shop professions, although there is still great scope for improvement. While the Organization for Economic Cooperation and Development has branded Greece and Portugal the “reform champions,” particularly when it comes to closed-shop professions, the EC report says that when comparing them with countries such as the UK and Finland there is still much work to be done. The distance from the other member states that have more flexible regulatory frameworks remains significant.

The Commission adds that Greece has been substantially damaged by the crisis, with a major impact on the speed of decision-making in the justice system as court cases are taking longer now. Up until 2012 the application of reforms was dominated by a lack of ambition, whereas a series of reforms in the justice system is now ongoing, the report says.

The EC also notes that labor reforms have resulted in a 9 percent increase in the country’s labor productivity. However there is no margin for complacency, the Commission warns, as now that the market pressures have eased, countries such as Greece, Portugal, Spain and Italy will have to remain entirely focused on applying a decisive reform agenda.

The report further highlights the additional benefits that will be reaped if reform efforts continue across all sectors.