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Greece must continue ‘impressive’ reforms, OECD says

The Organization for Economic Cooperation and Development has praised Greece for its “impressive” economic reforms, which it says are not always appreciated.

In a survey of Greece’s economy published on 2 August the OECD also predicts that Greece can recover from its current economic crisis so long as it completes its reform programme.

“Reforms carried out over the past year are impressive,” OECD secretary-general Angel Gurría said in Athens on 2 August. “This achievement does not always seem to be properly appreciated in Greece or abroad.”

Greece should simplify its tax system, for instance by cutting the number of distinct VAT rates and by lowering the threshold for tax-free personal income. It should also crack down on tax evasion, the report recommends. The country should also continue privatisation of state-owned enterprises, and end life-long job security for civil servants, and make temporary work in the public sector easier.

The survey also provides a progress report on Greece’s responses over the past two years on previous OECD recommendations.

In higher education, for example, the OECD recommended that Greece should amend its constitution to allow private universities and also to introduce undergraduate student fees. However, the report says that no action has been taken. The report does note that Greece is preparing university reform.

The report also says that the government plans to adopt a Framework Law for R&D by the end of this year, which will encourage links between researchers and business and enhance fiscal incentives to support research.

If the country follows the OECD’s recommendations, public debt could drop to 60 per cent of GDP by 2030, down from 140 per cent in 2010, the Paris-based organisation says.