Brussels, 22/10/2013 (Agence Europe) - In its fifth quarterly report, published on Tuesday 22 October, the European Commission's task force for Greece, which provides technical assistance to the government to help implement reforms, welcomed the positive developments in the Greek economy, but expressed concern at the high levels of unemployment.
EU European and Monetary Affairs Commissioner Olli Rehn said that there were positive signs of stabilisation of the Greek economy and he expected it to return to growth in 2014, but the situation remains difficult for ordinary people and the unemployment figures are tragically high. A close source said the burden of unemployment was likely to continue for a while yet and the Commission feels that one of Greece's priorities is to implement structural reforms that can support growth.
The task force's report welcomes absorption of the EU Structural Funds in Greece, where Rehn said great progress had been seen. Of the €20 billion available to Athens in European funding for the current programming period, 67.5% had been absorbed by the end of September, compared with 49% at the end of December 2012. Greece is therefore well above the European average and sixth in the EU league table for fund absorption explains the Commission.
The source commented: “Clearly the issue of lack of liquidity in the economy is a major concern in the Commission for some time” and to this end, the task force's report notes that getting the banks back on a sound footing is the first step, and Greek banks have now completed their recapitalisation. The same source points out that in July, German finance minister Wolfgang Schaüble, on an official visit to Athens, said that Germany was prepared to invest in a fund to provide liquidity to Greek companies.
The Greek economy may also benefit from better tax receipts because tax collection has improved. The task force says this is key not only to boosting the state coffers, but also to ensuring a fairer distribution of the tax burden. The government and the task force will boost their collaborative work in this domain to make life easier for businesses and speed up reform of the civil service.
Could the Greek adjustment programme have been done better? The source says it is difficult to say unless one has genuine examples from history of a similarly dramatic consolidation of public finances because of the ups and downs in the country's economy and political life. Speaking of the new government, the source said: “If we didn't see this determination to get out of crisis and apply the programme, then EU solidarity would probably have been much less,” adding that there was “great determination at European level to maintain solidarity with Greece.” (EL/transl.fl)