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Greek report card shows must do better on reforms

Published 04/16/2010, 02:14 PM
Updated 04/16/2010, 02:36 PM

* Greek government report says 33 of 45 tasks finished

* Deadline for tasks was end-March

* Tax reforms in place

* Pension change, trimming state organisations unfinished

By Harry Papachristou and Michael Winfrey

ATHENS, April 16 (Reuters) - Greece has tackled more than two thirds of its austerity-based goals due by the end of March, a government progress report showed, but it failed to deliver on pledges to trim a bloated bureaucracy and boost accountability.

A performance scorecard issued on Friday by the government on its own reform programme outlined progress on its efforts to eliminate corruption, waste and tax evasion and boost budget revenues to pull the euro zone state out of a crisis that has shaken the single currency.

The scorecard, the first in its kind to be released by any Greek administration, included 113 different tasks ranging from tax hikes to restructuring local government and re-evaluating prescription drug lists.

Of 45 tasks due by the end of March, the government said it met deadlines on 27, including a freeze on public sector hirings crucial to the government's goal of cutting the budget gap to about 8.7 percent of gross domestic product.

It finished six more tasks on Thursday when parliament passed a tax reform bill, raising the upper tax rate for those earning over 100,000 euros a year to 45 percent from 40 and introducing a progressive real estate tax.

The law also created a first-time tax on church real estate earnings and a 90 percent tax on bankers' bonuses.

INCOMPLETE REFORMS

But the government missed deadlines for other cost-cutting measures such as slashing the number of state-run organisations and committees, according to the scorecard, managed by Deputy Prime Minister Theodoros Pangalos.

It also failed to raise the mandatory retirement age for women in the public sector to the same as for men, 65, from 60 now, or introduce a system of checks and balances to improve data gathering.

Those practices, now the centre of an EU wide debate on closer monitoring of members with fiscal problems, fell into disrepute after the socialists revealed the government's public finance gap was twice as big as previously reported.

The admission was the catalyst for Greece's financial crisis.

On Thursday, Athens asked to start official talks with the European officials and the IMF to go over details of a potential 45 billion euro ($62.91 billion) bailout.

The European Commission has said Athens needs no further fiscal measures this year than those already planned.

But the belt-tightening is threatening to deepen an economic contraction estimated at 2 percent this year and hit budget revenues, while higher borrowing costs have hurt on the expenditure side, meaning Greece may need more austerity to cut its deficit to below 3 percent in 2012 as pledged.

Investors are carefully watching how successfully the government carries the steps out, and on May 15, the European Commission will submit its first periodic check on Greece's progress.

(Editing by John Stonestreet)

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