02/08/2011
By Matt Ritchie
The Organisation for Economic Cooperation and Development (OECD) has lauded Greece’s fiscal adjustment programme, including reform to the public pension system, though urged it is important to push ahead with further reform and limit the number of exemptions.
In a new economic survey of Greece, the OECD said that 2010’s pension reforms greatly simplified the system, bringing its generosity in line with that of most other OECD systems.
Pension spending is not expected to increase as a share of GDP between now and 2060 and Greek authorities are committed to taking any necessary steps to cut pension spending further if the increase exceeds 2½ per cent of GDP, the report said.
“The stronger incentives for seniors to participate in the labour market should also have a positive impact on medium-term growth. It is important, however, to proceed with the reform of supplementary pension funds and to strictly limit the list of strenuous occupations in order to reduce the number of people eligible for early retirement under preferential conditions.”
The pension reforms sit alonside a range of other measures aimed at reducing the “deep economic crisis” the country is mired in, and the OECD said Greece’s deficit reduction programme can succeed. The recently announced proposals to help Greece reduce its debt will also play a role.
“The package announced on 21 July 2011 should ensure reasonable interest rates on Greek debt, contains measures to enhance investment and growth, and will give Greece the time needed to implement reforms which will boost competitiveness and export performance.”
Presenting the survey, OECD secretary-general Angel Gurría praised the difficult decisions already taken by the Greek authorities, saying the achievements to date do not always seem to be properly appreciated in Greece or abroad.
“With improved competitiveness, we are seeing the first signs that the much needed macro-economic adjustment is gradually taking place."
Success will depend on strong reforms and thorough implementation, and Gurria stressed the need to ensure that the burden and benefits of reform are “broadly and fairly shared”.
An overview of the report’s findings is available here (pdf)
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