An International Monetary Fund (IMF) report has revealed today that debt-laden Greece has made progress in improving its finances, but the country must do more to fight tax evasion.
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.
Also, Athens was still too slow to cut public sector jobs, the IMF said.
IMF report revealed Greece has made progress in improving its finances, but the country must do more to fight tax evasion
Cutting the budget deficit and making its economy more competitive were key conditions of the 240 billion-euro 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.
“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”.
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.
It also 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.
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.
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, an EU 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.
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.
Hundreds of thousands of people have taken part in protests across Portugal against government austerity measures.
Huge crowds gathered in the capital Lisbon to demand the government resign.
Many carried placards condemning the “Troika” of the IMF, the European Commission and the European Central Bank, which demanded budget cuts in return for a financial bailout.
The conservative government has introduced steep tax rises as it tries to reduce a huge budget deficit.
Unemployment is at a record 17.6% and the economy is expected to contract by 2% this year – the third straight year of recession.
The demonstrations organized on social media also have the backing of Portugal’s main trade union federation.
On Saturday, organizers said as many as 500,000 protested in Lisbon, and hundreds of thousands more in other towns and cities.
The rallies coincide with a visit by inspectors from the EU and the IMF, which demanded austerity measures as a condition for a 78 billion-euro bailout in 2011.
Hundreds of thousands of people have taken part in protests across Portugal against government austerity measures
Protesters carried banners with slogans such as “Austerity Kills” and “Screw the Troika”.
They also chanted a popular song “Grandola” associated with the 1974 “Carnation Revolution” that brought an end to dictatorship.
“This government has left the people on bread and water, selling off state assets for peanuts to pay back debts that were contracted by corrupt politicians to benefit bankers,” film director Fabio Carvalho, who was among the protesters in Lisbon, was quoted as saying by Reuters.
“If not today, things have to change tomorrow and we need to remain in the streets for the government to fall.”
The demonstrators are demanding a complete change of course from the government, but it says further spending cuts are necessary to revive the economy.
This year’s budget was Portugal’s toughest in living memory, imposing tax rises that for many workers amount to a month’s wages.
But the gloomy economic outlook means it will almost certainly have to find more saving.
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President Barack Obama and Republican Mitt Romney have clashed over their economic plans in the first of three televised debates.
In their Denver duel, the candidates contrasted their approach on taxes, the deficit and healthcare.
Barack Obama said he would ensure Americans were “playing by the same rules”. His rival said re-electing Barack Obama would continue a “middle-class squeeze”.
The president has held a narrow lead in recent opinion polls.
He went into the debate ahead in national polls and in many surveys in the swing states that will decide the election.
But he faced a confident opponent on the debate stage, with Mitt Romney, a former Massachusetts governor, sounding bullish throughout.
By contrast, the president at times appeared hesitant, occasionally asking moderator Jim Lehrer, of US public television network PBS, for time to finish his points.
Throughout the debate, each man attempted to paint his rival as a disaster for working American families.
They traded barbs on their economic plans, with Barack Obama describing his rival’s approach as “top-down economics” and a retread of Bush-era policies.
“If you think by closing [tax] loopholes and deductions for the well-to-do, somehow you will not end up picking up the tab, then Governor Romney’s plan may work for you,” he said.
“But I think math, common sense, and our history shows us that’s not a recipe for job growth.”
Mitt Romney derided Barack Obama’s policies as “trickle-down government”.
“The president has a view very similar to the one he had when he ran for office four years ago, that spending more, taxing more, regulating more – if you will, trickle-down government – would work,” Mitt Romney said.
“That’s not the right answer for America.”
Mitt Romney pledged not to reduce taxes for wealthy Americans, and said Barack Obama had misrepresented Romney’s tax plans on the campaign trail.
He hit out at the president for failing to cut the budget deficit in half as he pledged in 2008, and insisted that the US must not allow itself to go down the path of Greece or Spain.
Clashing repeatedly with Jim Lehrer over the time clock, Mitt Romney said that in order to reduce the $1.1tn US budget deficit he would repeal Barack Obama’s 2010 healthcare law and cut other unspecified programmes.
Barack Obama deflected criticism of his fiscal management, highlighting Mitt Romney’s pledge not to raise additional tax revenue. He said Mitt Romney’s approach to deficit reduction was “unbalanced” as a result.
“There has to be revenue in addition to cuts,” Barack Obama said.
On healthcare, Mitt Romney said that Barack Obama’s “Obamacare” reform law of 2010 had increased health costs and kept small businesses from hiring.
Even as he pledged to repeal Barack Obama’s health law, Mitt Romney praised and defended a plan he himself had previously signed as governor of Massachusetts that is widely hailed as the model for the Obama law.
Barack Obama, meanwhile, said his plan had kept insurance companies from denying coverage to sick people.
As the debate ended, each candidate’s allies rushed to talk up their man’s performance.
“The average person at home saw a president who you could trust,” Barack Obama adviser David Plouffe told reporters.
“That’s what the American people are looking for.”
But senior Mitt Romney aide Eric Fehrnstrom said the president had spoken “only in platitudes”.
“If this was a boxing match, it would have been called an hour into the fight,” he added.
The University of Denver debate was the first in a series of three presidential forums and one vice-presidential encounter this month.
Running-mates Joe Biden and Paul Ryan will meet in Danville, Kentucky on 11 October, before the second presidential debate on 16 October.
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