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Greece: IMF hails economic 'progress' but warns on tax evasion | Greece: IMF hails economic 'progress' but warns on tax evasion |
(35 minutes later) | |
Debt-laden Greece has made progress in improving its finances, but the country must do more to fight tax evasion, the International Monetary Fund has said. | Debt-laden Greece has made progress in improving its finances, but the country must do more to fight tax evasion, the International Monetary Fund has said. |
In a report, the IMF said Greece had made "exceptional" progress on reducing its budget deficit since 2010. | In a report, the IMF said Greece had made "exceptional" progress on reducing its budget deficit since 2010. |
But the IMF, one of the lenders that backed a bailout of Greece, said the "notorious" problem of tax evasion was still a major issue. | But the IMF, one of the lenders that backed a bailout of Greece, said the "notorious" problem of tax evasion was still a major issue. |
Also, Athens was still too slow to cut public sector jobs, the IMF said. | Also, Athens was still too slow to cut public sector jobs, the IMF said. |
Cutting the budget deficit and making its economy more competitive were key conditions of the 240bn-euro (£202bn) bailout from the European Union and the IMF. | Cutting the budget deficit and making its economy more competitive were key conditions of the 240bn-euro (£202bn) bailout from the European Union and the IMF. |
"Progress on fiscal adjustment has been exceptional by any international comparison," the IMF said in its report, which followed a visit by officials to the country. | "Progress on fiscal adjustment has been exceptional by any international comparison," the IMF said in its report, which followed a visit by officials to the country. |
"Greece has also made a significant dent in its competitiveness gap," the report said. | "Greece has also made a significant dent in its competitiveness gap," the report said. |
But the IMF added that "insufficient" structural reforms have meant that deficit cutting has been achieved primarily through cutting jobs and salaries bringing "unequal distribution of the burden of adjustment". | But the IMF added that "insufficient" structural reforms have meant that deficit cutting has been achieved primarily through cutting jobs and salaries bringing "unequal distribution of the burden of adjustment". |
The IMF also said that "very little" had been done to tackle Greece's "notorious tax evasion," with the rich and self-employed "simply not paying their fair share" as austerity unfairly hits mostly public sector workers earning a salary or a pension. | The IMF also said that "very little" had been done to tackle Greece's "notorious tax evasion," with the rich and self-employed "simply not paying their fair share" as austerity unfairly hits mostly public sector workers earning a salary or a pension. |
'Taboo' | 'Taboo' |
The Fund called on the government to strengthen the independence of the tax administration to make it easier to reform the system. | The Fund called on the government to strengthen the independence of the tax administration to make it easier to reform the system. |
On public sector jobs, the IMF said Greece is too reliant on voluntary departures. "The taboo against mandatory dismissals must be overcome," the report said. | On public sector jobs, the IMF said Greece is too reliant on voluntary departures. "The taboo against mandatory dismissals must be overcome," the report said. |
Last month, the Greek parliament adopted a law that will allow the dismissal of 15,000 civil servants. | Last month, the Greek parliament adopted a law that will allow the dismissal of 15,000 civil servants. |
But under Greece's current bailout plan agreed in November, Athens has to cut 150,000 public sector jobs overall from 2010 to 2015, about a fifth of the total. | But under Greece's current bailout plan agreed in November, Athens has to cut 150,000 public sector jobs overall from 2010 to 2015, about a fifth of the total. |
Compulsory redundancies are a sensitive issue in Greece where unemployment has hit a record high of 27.2% and the economy is now in its sixth year of recession. | Compulsory redundancies are a sensitive issue in Greece where unemployment has hit a record high of 27.2% and the economy is now in its sixth year of recession. |
Last week, a European Union report forecast that Greece would end years of recession in 2014 with growth of 0.6%, in line with an earlier forecast by the IMF. | |
But, following what the IMF forecast will be a 4.6% contraction of the economy this year, the Fund warned that attempts to "artificially" stimulate growth should be resisted. |
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