Reuters: Regulatory News: UPDATE 1-Greece's reform pace needs a boost to spur growth -Commission

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UPDATE 1-Greece's reform pace needs a boost to spur growth -Commission Oct 22nd 2013, 11:37 Share this Email Print Reprints Tue Oct 22, 2013 7:37am EDT * EU Task Force praises Greece on taxes, asks for more reforms * Commission to soon clear motorway construction projects worth billions * EU mulls more aid for underfinanced Greek companies BRUSSELS/ATHENS, Oct 22 (Reuters) - Greece has made progress in tackling fiscal problems but needs to accelerate the implementation of structural reforms and raise the efficiency of public administration to spur growth, the European Commission said on Tuesday. Athens has been on an international financial life line since 2010, with loans granted in exchange for spending cuts and reforms. After more than three years of painful economic adjustment the government has repeatedly ruled out imposing new austerity measures on a nation now in its sixth year of recession. The Commission, together with the International Monetary Fund and the European Central Bank, have stressed the importance of speedy structural reforms to help the country to recover. In a report, released in Brussels, the Commission pointed to the need for a well functioning tax system, a reform of central public administration and the creation of a supportive and predictable business environment. "Growth and job creation can only come from thriving companies with easy access to liquidity and markets," an EU Task Force of about 60 EU officials advising Greece said in its Fifth Activity Report on Greece. Greece, expected to return to growth next year, is currently at odds with international creditors over the size of the country's budget gap next year, prompting talk that Athens might be forced to adopt new austerity measures. "It would be a great pity if all the sacrifices the Greek people have made in the last years would not lead to success," a senior European Commission official told reporters at a briefing in Athens. In a bid to unlock badly-needed investment to revive Greece's ailing economy, the Commission is expected to clear by the end of the year four big toll-road construction projects worth 7.6 billion euros ($10 billion), the report said. The projects have been suspended for three years as both the government and concessionaires, including Germany's Hochtief and France's Vinci, had sought terms to be revised to take account of Greece's crisis. Resumption of the EU-cofinanced projects would revive investment, which has slumped by a total 61 percent in the country's 2008-2013 recession and is expected to drive a modest economic recovery of 0.6 percent next year. The Task Force is also trying to help Greece unlock more EU funds and loans to provide finance to struggling small companies, which have been effectively shut out of Greece's banking system. Despite record low interest rates by the European Central Bank, Greek businesses' borrowing costs have hit a record average level of 6.6 percent, according to government estimates. "Perhaps there needs to be a more comprehensive approach to help small and medium enterprises," the EU Commission official said. "They're the backbone of the Greek economy". ($1 = 0.7312 euros) Link this Share this Digg this Email Reprints

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