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article imageIMF: Reforms in Greece fail to deliver expected results

By Katerina Nikolas     Dec 14, 2011 in World
Athens - Poul Thomsen of the IMF has commented on the latest report on Greece's finances, expressing disappointment in the slow pace of reforms.
The International Monetary Fund (IMF) reported disappointment that structural reforms in Greece have so far failed to reach expected targets as the debt ridden nation remains mired in recession. IMF mission chief Poul Thomsen did however rule out further tax increases, pointing out that expenditure would need to be curtailed as an alternative as "there was no more scope for taxation on an austerity-weary public." (Ekathimerini)
The fifth report by the IMF on the state of Greece's finances said “The economic situation in Greece has taken a turn for the worse, with the economy increasingly adjusting through recession and related wage-price channels, rather than through structural reform-driven increases in productivity." (Athens News) The report highlighted "The authorities have also struggled to implement the reforms approved under the June medium-term fiscal strategy,” drawing attention to the slow progress made under the previous government.
Measures to tackle the ongoing fiscal problem have seen widely imposed austerity measures in the form of higher taxes, the introduction of an emergency property tax, wage cuts, pension cuts, and job cuts in the bloated public sector. Measures to tackle tax evasion have been pondered rather than acted upon, with millions of euros owed in taxes by and stashed in Swiss bank accounts. However, several arrests of tax evaders have taken place in recent weeks.
One of the greatest recipients of Greek public spending is the military budget, with billions spent buying French and German armaments in an agreed deal. Expenditure on defence could be slashed alongside the reduction in public sector jobs.
The Washington Post reported that the markets did not respond favorably to the IMF report, showing little confidence in the ability of indebted eurozone countries to pay back their debts. Friday's summit in Brussels did little of any note to address the real issues whilst passing further Greek sovereign control over to the EU masters.
More about IMF Greece, Greece debt crisis, recession Greece, Poul Thomsen
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