EU casts doubt on economic reforms

Greece has made only marginal progress in implementing recommended reforms to its economy and has done little to allay serious doubts over the future of its public finances, according to a European Commission report published yesterday. The second implementation report on 2003-2005 Broad Economic Policy Guidelines said Greece had made «only limited progress» in addressing the three main policy areas that the Commission had suggested it should examine: the long-term viability of its public finances, increasing productivity and tackling unemployment. Despite strong economic growth, the government has taken no action to substantially reduce debt and correct its excessive deficit, according to the Commission. The report says this inaction has made it more difficult for Greece to balance its books. Reforms to the social security system have also been too weak to alleviate future pressure on the public purse strings, especially as Greece is facing the problem of an aging population, the report says. The Commission says that despite some efforts to improve its low level of productivity, Greece still needs to take major steps. The report identifies, for example, a decrease in Greece’s rate of adoption for EU internal market directives, by which it currently lies 20th out of 25 member states in this area. The report also cites limited progress toward reducing the high rate of structural unemployment and increasing unemployment rates, particularly for women.