by more than 29 percent between 2009 and 2013, accordingto recent data rom the EU Commission.
Second, theGreek government revenue ratio (revenues in percent o GDP) increased by more than 6 percentage points to nearly 45 percent o GDP between 2009 and 2012. Tird, thescal decit has decreased by a remarkable 9 percentagepoints relative to GDP, when one-o scal measures areexcluded. Fourth, the structural (cyclically adjusted) decit(excluding one-o measures) even shrank by nearly 14percentage points. Such an adjustment is almost unprec-edented. Hence, the structural primary balance (withoutinterest payments) has reached positive gures in 2012(around 4 percent o GDP), a signicant achievement.With Greece’s budget or 2013, passed in all o 2012, thistrend is expected to continue. Te roika set clear stan-dards with regard to a reliable medium-term nance planuntil 2016. Consequently, the proposed consolidationmeasures or 2013 and 2014 are clearly ormulated andmostly already implemented. Tese austerity measuresparticularly address those expenditure items that increasedsignicantly aer 2000 until the beginning o the nancialcrisis, essentially, welare spending and the governmentwage bill. Further, the government plans to reduce publicsector employment over the medium term by 150,000positions. It wants to replace only one in ve voluntary or age-related exits rom its workorce.
Moreover, themedium-term strategy will be supported by clear expen-diture limits, which are broken down to the level o indi- vidual ministries. Newly introduced online reportingobligations on expenditure developments are intended tomake compliance with these limits easier to veriy.ax collection has improved, as the signicantly highergovernment revenue ratio shows. However, the ghtagainst tax evasion and corruption will remain a reormpriority. Special units o skilled tax inspectors have beenormed to collect taxes rom wealthy individuals and romthe sel-employed. Key tax inspectors will rotate their posi-
2 The data for 2013 is based on Commission estimates. Between 2009 and 2012,primary government spending in Greece was reduced by 15 percent. When one-off measures are excluded (such as those related to nancial aid to the nancial sector inGreece), the reduction is signicantly higher and amounts to more than 20 percent.3 The most recent milestone to be reached included the identication of 15,000 em
ployees for mandatory dismissals by 2015. These redundancies are intended to makeroom for new and better qualied employees, for example to improve the government’scapacity to supervise the nancial sector. After rst persistently resisting mandatorydismissals, Greece has now provided a plan for stepwise dismissals of 15,000 publicemployees in total. The implementation of this measure should be closely surveyed bythe Troika.
tions regularly in the uture. According to media reports,withholding inormation about tax evasion will becomea criminal oense or tax inspectors. Additionally, therewill be investigations to ensure that the individual wealthlevels o tax inspectors are in line with their ocial sala-ries. In light o the well-known and chronic problems withtax collection, these steps are highly welcome; however, itremains to be seen how eective they will turn out to be.
Labor Market Reforms
Tere has also been signicant progress with regard tolabor market reorms. Unortunately, this has not yet ledto an improvement in the current employment situationdue to the deep recession. Once the economy recovers,however, this reorm progress should become worthwhile,as major obstacles to employment have been removed.Beore the reorms started, the system o collective wagenegotiations was rather rigid. Tere were hardly any work-place-related wage agreements. National and industry-widewage agreements were oen extended to rms not partici-pating in collective agreements and had a long-lastingeect even aer expiration. Tis institutional arrangementmeant that collective bargaining oen ailed to take intoaccount the economic situation and evolution o produc-tivity at the plant level. In addition, price competitivenessdecreased via rising unit labor costs. Furthermore, sticky wages and working hours led to an excessive rise in unem-ployment during the recession, as rms had no alternativesto laying o their employees when sales contracted sharply.By now, much has changed. Several reorm steps haveallowed workplace-related wage agreements to gainground. Te automatic extension o industry-wide collec-tive agreements to rms not participating in collectiveagreements has largely been abolished along with a clausethat subordinated wage agreements at the plant level.Furthermore, employees are now allowed to directly negotiate their wages with their rm’s management
There has been signicantprogress with regard to labormarket reforms.