Brus­sels warns third re­view is cru­cial

Timely com­ple­tion of ne­go­ti­a­tions and re­forms is nec­es­sary con­di­tion for the suc­cess of bailout pro­gram

Kathimerini English - - Focus - BY ELENI VARVITSIOTIS

BRUS­SELS – In a re­port re­leased yes­ter­day, the Euro­pean Com­mis­sion de­tailed Greece’s progress in the first two years of the coun­try’s third three­year bailout pro­gram in the way of fis­cal, bank­ing, busi­ness en­vi­ron­ment, jus­tice and pub­lic ad­min­is­tra­tion re­forms. It warned, how­ever, that it is the im­ple­men­ta­tion of the pend­ing re­forms that will de­ter­mine the over­all suc­cess of the pro­gram.

Ac­cord­ing to the 187-page re­port, de­spite the Greek econ­omy’s con­sid­er­able stamina, real gross do­mes­tic prod­uct only started re­cov­er­ing in mid-2016 and “this re­cov­ery re­mains frag­ile and de­pends to a great ex­tent on the progress of pro­gram re­views.”

Brus­sels at­taches great sig­nif­i­cance to the com­ple­tion of the third re­view, not­ing that while it projects the econ­omy will ex­pand by 2.5 per­cent in 2018, driven by pri­vate con­sump­tion and in­vest­ments, growth is in­ex­tri­ca­bly linked to the com­ple- tion of the re­view, as “the de­struc­tive re­sults the de­lays in the com­ple­tion of the sec­ond re­view had on con­fi­dence in the Greek econ­omy were ob­vi­ous.”

The re­port fur­ther recorded that mar­ket con­di­tions are on the mend, em­ploy­ment grew by 1 per­cent in the first half of this year and the job­less rate dropped to 21 per­cent in July, while also point­ing out that the un­em­ploy­ment rate re­mains par­tic­u­larly high, es­pe­cially among young peo­ple.

The Com­mis­sion is call­ing for more of an ef­fort to tackle bad loans, as well as an end to “the struc­tural prob­lems that lead to the ac­cu­mu­la­tion of new ex­pired debts.”

The re­port of­fers a de­tailed ac­count of the var­i­ous re­forms im­ple­mented in tax col­lec­tion, in the so­cial se­cu­rity sys­tem, in the credit sec­tor (with the suc­cess­ful re­cap­i­tal­iza­tion in late 2015), in the en­ergy mar­ket, in pri­va­ti­za­tions and to­ward the sep­a­ra­tion of the civil ser­vice from po­lit­i­cal par­ties. 717.47 1.1656

It also notes that “a new set of la­bor mar­ket re­forms have been agreed,” in­clud­ing the align­ment of the col­lec­tive re­dun­dan­cies frame­work with com­mon Euro­pean prac­tices, and mea­sures to strengthen the coun­try’s ju­di­cial pro­ce­dures re­lated to in­dus­trial ac­tion as well as the modernization of union leg­is­la­tion, along with the main­te­nance of the ex­ist­ing frame­work on col­lec­tive la­bor bar­gain­ing (with the prin­ci­ples of ex­ten­sion and fa­voritism re­main­ing sus­pended).

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