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Strong Start to Greece Austerity - EC

greece austerity planGreece has made a strong start to its austerity programme, meeting all of its June performance criteria, but challenges and risks remain, said the European Commission (EC) in a joint statement with the ECB and IMF today.

Although the overall deficit target for June was met, there were problems controlling expenditures in local governments, hospitals and social security funds, said the report.

"Another key challenge is to further strengthen tax administration, including to reduce tax evasion by high-income and wealthy individuals," says the report.

There was praise for the labour market reform that is underway in Greece: "important progress has already been made with liberalisation of road haulage, and energy," said the report. Greece's hauliers ended a one week strike on Monday after the government stood firm on its refusal to back down on reforms to the haulage industry.

The report said that although Greece is still unable to access international capital markets, market sentiments "appear to be improving". The Euro surged on the news, gaining ground against other major currencies.

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