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Debt inspectors Greek reforms face critical test

first_img Facebook Twitter: @NeosKosmos Instagram Greece’s ambitious programme to overcome its debt crisis has reached a “critical juncture” and faster structural reforms are needed, its international bailout inspectors said Friday. Our overall assessment is that the programme remains broadly on track,” Thomsen said. “But it is at a critical juncture which needs a speed up of structural reforms to keep it on track.”Officials from the International Monetary Fund, European Central Bank and European Commission said the country’s reforms were broadly on track despite delays in some sectors, and they would recommend that Greece receives the next installment of its bailout loans. The 15 billion euros are part of a 110bn euro package of loans from the IMF and other eurozone countries that saved Greece from bankruptcy last May. In return, Greece has been pushing through a series of austerity measures and reforms, which IMF mission chief Poul Thomsen said were generally being implemented as planned despite delays and shortfalls in certain areas. “Our overall assessment is that the programme remains broadly on track,” Thomsen said. “But it is at a critical juncture which needs a speed up of structural reforms to keep it on track.” The initial part of the programme had “successfully pulled the economy back from the abyss,” he added.Servaas Deroose of the European Commission said a “decisive breakthrough in the following weeks and months will be crucial.” The current year will be a crucial one “for Greece to restore credibility of its economic policies,” Deroose said. “That is the prerequisite for Greece to regain market access in the course of next year.” At the end of their latest inspection, the debt inspectors called on the government to boost the size of their privatisation drive to 50 billion euros through 2015. “To help reduce public debt and to support higher investment and growth, it is essential to scale up privatisation in the economy,” said Deroose.He said a comprehensive plan through 2015 would be finalised that would “target total proceeds of privatisation in the order of 50bn euros for 2011-15, of which at least 15bn euros in 2011-2012.” The initial privatisation programme called on the government to raise 3bn euros through asset sales from 2010-2012, but that figure was increased to 7bn during talks with the government in November, Deroose said. However the government has studied the issue a lot and it is well known that there is quite a huge potential for privatisation,” he said, adding that the three main sources of privatisation would be listed and unlisted companies, government assets in those companies, and commercial real estate. The Papandreou’s government’s austerity plan has included increasing taxes, raising retirement ages and cutting salaries and pensions.It has also pledged to restructure loss-making state transport companies, reform the public health sector and eliminate tightly controlled licensing practices and fixed profit margins for dozens of professionals, from pharmacists to lawyers and notaries. The country has pledged to reduce its budget deficit to below the EU limit of three percent of gross domestic product by 2014. Source: APlast_img read more