IMF’s Ten Commandments to Greece: Enough is not Enough!

Posted by in Economy

 The International Monetary Fund approved yesterday the 4,1 billion euros loan tranche for Greece. However even thought the IMF asserts that Greece has made progress under the strict austerity program, it stresses that the country needs more “major reforms to be designed and implemented”. In a press release by the IMF we can read the fiscal achievements of Greece and the content of our lenders about falling “unit labor costs”,  “significant adjustment is under way”  and  “measure of stabilization has been achieved”.

Nevertheless, John Lipsky, First Managing Director of IMF, grabbed the chance and together with his content delivered yesterday the IMF’s “Ten Commandments” to the Greek nation – that in fact they are Fifteen! :

“Greater emphasis on underlying reforms will be needed during the period ahead. While the 2010 fiscal target was met, the strategy of under-executing the state budget to offset revenue shortfalls and overspending at subnational levels cannot be sustained. (1. collect taxes 2.cut state spending!)

“To help put the fiscal adjustment on a firmer foundation, it will be important to complete by May a medium-term budget strategy. (3. write down strategy)  Ensuring a fair distribution of the adjustment burden remains paramount, and the dialogue with social partners in this process is welcome. (4. dialogue) Implementation should begin during 2011 to address a projected budget gap. (5. hurry up!)In parallel, the government should redouble efforts to combat tax evasion and control spending, especially at the local government level. (6. Collect Taxes, decrease spending, control municipalities!)

“To support the recovery, structural reforms need to be deepened. Legislation to liberalize regulated professions needs to be fully implemented, as do reforms pertaining to collective bargaining and the pension system. (7. open close professions, stop collective bargaining, cut pensions!) Important next steps include reducing administrative barriers to exports and formulating a strategy to unlock potential in the tourism sector. (8. kill bureaucracy, boost tourism revenues)

“The government’s commitment to scale up its privatization and real estate development program is timely. (9. Sell! Sell! Sell! ) More efficient use of state assets will support the fiscal adjustment efforts, promote growth and employment, and help Greece retire maturing debt.

“The financial system remains stable, and time will be provided to allow banks to deleverage and restructure in an orderly fashion. (10. bank mergers!) Capital support through the FSF remains available to viable banks if necessary. (Full Article here )

“The authorities are to be commended for their commitment to this ambitious program, which will help Greece return to growth and prosperity,” John Lipsky concluded. Until growth and prosperity returns, I wonder why millions of Greeks are desperate and see no light ahead but only the tunnel.