European Economic Affairs Commissioner Olli Rehn has identified a lack of administrative capacity and political will as the main factors preventing Greece from implementing the reforms it has agreed with the troika.
Speaking at a hearing of troika representatives in the European Parliament on Tuesday, Rehn said that efforts were being made to rectify the problems so the program accompanying the second bailout would be more effective.
“The first program for Greece teaches us an important lesson. It had two Achilles' heels. One was the weak administrative capacity of the Greek administration, which did not allow reforms to be pursued with sufficient vigour. Second was the lack of necessary political unity, which is required to mobilise sufficient support for the demanding reforms,” he said.
“For the second program, we are mobilising all the assistance we can to support the Greek administration in strengthening its administrative capacity. But the second Achilles heel, the lack of political unity, while improved recently, can only be healed by the Greek citizens themselves.”
Rehn said that the reforms and fiscal adjustments being implemented under the second program would be fairer than the first.
“The program aims at social fairness. The cuts in pensions have been targeted at highest pensions, while protecting the lowest pensions. The reduction in rents in the healthcare system is designed to maximise benefits for the ordinary citizen,” he said.
“The tax system has been made more progressive. And more importantly, the fight against tax evasion is critical for the programme – not only because of additional fiscal revenues, but also for the sake of social fairness and acceptability of the program.”
The Commissioner said that the presence of the EU Task Force in Greece would help improve the country’s administrative capacity and help speed up reforms.
“The Task Force for Greece is a resource provided by the Commission, put at the disposal of the Greek authorities, as they seek to build a modern and prosperous Greece,” he said.
“It channels technical assistance from the member states' administrations to assist Greece to design and implement reforms needed for a healthy recovery. Our aim is that, as a result, the Greek citizens will enjoy better public services, a fairer taxation system and a better environment for business and investment.”