Brussels, 15/03/2012 (Agence Europe) - The work of the European taskforce on Greece is starting to bear fruit, although its job of introducing a root-and-branch reform of the Greek economy is a labour of Hercules. Gradual absorption of EU Structural Fund cash and more tax arrears collected than expected in 2011 (€946 million, compared with the forecast of €400 million) are some of the positive outcomes listed by the European Commission in the taskforce's second quarterly report, published on Thursday 15 March 2012. Next month, the Commission will unveil a strategy for growth in Greece, as announced by the Commission president, José Manuel Durão Barroso, at the European Parliament this week. On Friday this week, the report of the troika of lenders to Greece (the European Commission, ECB and IMF) will publish a report on the affordability of the Greek debt.
The head of the taskforce, Germany's Horst Reichenbach, said that the first tangible, positive outcome of the taskforce was the fact that Structural Funds for Greece are being better targeted and there has been real progress in actually implementing co-funded projects. Absorption of the Structural Funds has now reached 35% in Greece, higher than the EU average (33.5%). Of the €20 billion of Structural Funds available for 2007-2013, €8 billion has already been paid out. The taskforce is helping Greeks restructure the way funds are allocated by identifying more than a hundred priority projects. Reichenbach said the important thing now was proper implementation and detailed monitoring of action on the ground. He mentioned that funding was available to finance small business, like the €300 million earmarked in the Jeremiah Fund (from the EIB).
Reichenbach, who is the vice-president of the EBRD, explained that there have been other positive outcomes in the field of structural reforms. The Greek government is in charge of piloting the reforms and is benig given unprecedented aid by 16 EU member states, the European Commission, the IMF and the OECD. France and Germany are involved in the huge project to reform local government. On the tax front, Reichenbach said there have been improvements in the Greek tax collection programme, which collected €946 million in 2011, more than double the target, and also reduced the number of legal cases on tax matters by 15%.
Reichenbach said that much remained to be done to update the Greek civil service, but there was an enormous potential to cut red tape. He gave an example. It takes 20 days to complete export controls in Greece, double the EU average of ten days. The taskforce is involved in the process of updating the healthcare system to cut costs and projects are being prepared in the judicial domain. It is currently being examined how performance of Greek civil servants can be measured (a practice common in other member states), added Reichenbach.
Some 45 people are working full-time in the taskforce on Greece. Fifteen of them are based permanently in Athens. National experts (two from Germany, two from the UK, two from France, two from the Netherlands, one from Belgium and one from the Czech Republic) are also in the taskforce. The second Greek bailout includes a strengthening of technical assistance and the monitoring of reform implementation in practice (see EUROPE 10558) and the Commission will soon be deciding how to carry out this new work. Reichenbach welcomed the agreement in principle on the aid packaeg (€130 billion and a private sector bond write-down of over €100bn) because it removes some of the uncertainty surrounding the country's budget and macroeconomic situation. He said it was important for the Greek authorities to take proper leadership of the reforms. (MB/transl.fl)