Looking at the Greek programme, Rehn commented on fiscal and structural issues, citing three areas in which important progress has been made regarding structural reforms.
On fiscal consolidation, the improvement in Greece's structural budget balance has already exceeded the 10 percentage points required at the start of the first programme in May 2010 for the period from 2009 to 2014. In fact, Greece has already improved its structural balance by no less than 13 percentage points of GDP since 2010. And this margin will increase further with the implementation of the additional measures foreseen for 2013 and 2014. I hope that all those who openly dismiss the potential of this programme to restore fiscal sustainability in Greece will dwell on these figures.
Moreover as regards structural reforms, it is time to debunk the perception that no progress has been made. This perception is damaging, it is unfair, and it is simply wrong. I will cite just three areas in which important progress has been made.
First, in the healthcare sector, measures to control over-prescriptions and fraud mean that public expenditure will have fallen by €1 billion (or around 25 per cent) this year, and should fall by a further €800 million over the next two years. Greece now has in place one of the most advanced electronic prescriptions systems in Europe, which has delivered monthly savings of around €30 million since the start of this year.
Second, a series of reforms to the pension system have now increased the statutory retirement age to 67 years, introduced a link to life expectancy. In two years, Greece has moved from having a pension system that was clearly unsustainable, to one whose medium-to-long-term sustainability is guaranteed.
Third, extensive reforms to the labour market have already led to a substantial improvement in cost competitiveness. Greece is on track to meet the target set out in the Memorandum of Understanding of a 15 per cent reduction in unit labour costs between 2012 and 2014. By the end of this year, all of the competitiveness loss experienced by Greece between 2001 and 2009, relative to the rest of the euro area, will have been recouped.
All of this is not to deny that there have been difficulties and delays. Nor is it to minimise the challenges that lie ahead. But it is right and necessary to recognise how far Greece has come in terms of fiscal reforms, and in the most of trying of circumstances for the Greek people.
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