Greece’s fiscal adjustment programme needs to be strengthened to ensure the return of the country’s public finances to a sustainable course, the European Commission said on Wednesday.
In a quarterly report on economic situation in the Eurozone, the Commission stressed that despite a remarkable fiscal adjustment achieved so far in Greece, total progress is more complex, taking in mind the country’s high debt level and the prevailing political context. It underlined that fiscal and other reform efforts should continue in Greece, Ireland and Portugal, allowing further reductions to fiscal deficits and activating a “critical mass” of reforms necessary to improving business environment and growth prospects, paving the way to sustainable economic recovery.
The Commission said that a fiscal adjustment programme for Portugal was still recent and it was premature to have any significant results, although it stressed that strong political consensus over the programme was the right basis for its implementation.
For Ireland, the report stressed that significant progress has been made, mainly on recapitalizing and restructuring the banking sector and towards fiscal consolidation.