IMF Report - Greece Has Made "Significant Progress"

Greece has made "significant progress" in correcting imbalances (existing) before the crisis, the International Monetary Fund said in a report on Wednesday. The report, which was drawn up by the IMF's delegation to Greece underlined, among other things, that there were significant delays and deviations and at the same time pointed out that a reform effort is "way back from schedule".

The head of the IMF delegation to Greece, Poul Thomsen, stated that Greece, with the help unprecedented European and international support as well as a stable fiscal adjustment by Greek authorities, was now on the threshold of achieving primary balances - a remarkable achievement - while "external imbalances have also fallen significantly".

The IMF report also emphasized that Greece was now in the sixth year of recession, with GDP down by almost 25 pct, unemployment at around 27 pct and youth unemployment at 57 pct. At the same time it revealed that "the high cost of adjustment in a significant part reflected the delayed, hesitant and fractional implementation of structural reforms," which had clashed, via "repeated political crises," with "vested interests" that affected the investment climate in the country. Also, the report pointed out that reforms needed to move forward rapidly "to unlock growth and create new jobs".

The report also noted that recent macro-economic developments are generally in line with the program's estimates and that fiscal results so far are generally consistent with the programme's targets. It said that delays in setting property taxes, overshooting in health budget spending and weaknesses in Greek tax collecting mechanisms were possible risks to the program.

Finally the report from the IMF said that there has been some progress in tax administration, in strengthening the independence of tax revenue, although debt collection is lagging behing targets despite recent legislative changes.

(Combined Reports)