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Chart 17Graph 11.1 labour reform intensity and direction of reforms in EU countries since 2010European CommissionThe Second Economic Adjustment Programme for Greece. Fourth ReviewGraph 11.1: Labour reform intensity and direction of reforms in EU countries since 2010201510Job protection10864Labour taxation5200-5-10-15-2-4-6-8-20-10ITESELLTSKPTROBECZFRNLUKHUSILVBGATEEMTFISECYDKIELUDEPLBEHUELSKITLVESIEUKATDEEEFIFRROCZPTCYMTPLSESIBGDKLULTNLIncreasing DecreasingIncreasing Decreasing5Wage setting8Working time064-52-100-15-2-4-20-6-25ELESCYBEPTIEITFRROSKBGDEEELTCZHULULVSEUKFIMTNLPLSIATDKIncreasing Decreasing-8ESBEATELLTFRPLSKBGHUITMTPTROSILUSEUKCYCZEEIENLDEDKFILVIncreasing Decreasing6Welfare benefit10Unemployment benefit48624200-2-2-4-4-6-8-6-10BEIEFISKDEDKESLTUKATLVPLHUPTROSESIBGCZEEFRLUNLCYELMTITBEESITPTFISIBGEEELIECZDKHULVROUKATFRLUMTNLPLSESKCYDELTIncreasing DecreasingIncreasing DecreasingNote: Member States are sorted by total number of reforms (both increasing and decreasing stringency; most reforms on the left, least reforms on the right) |Source: LABREF database, Commission services3.4.2. Social safety nets95. Improving social safety nets is an urgent policy priority. Greece has been historically a country witha welfare system quite limited in scope. Faced with the current major challenges, there is now growingawareness in the country that the current welfare system urgently needs a major overhaul to bettersupport both transitions across jobs and the needy. Indeed, strengthening the welfare system andimproving social safety nets within the current budgetary envelopes by increasing effectiveness andefficiency of welfare spending are urgently needed to create a fiscally sustainable, integrated and costeffectivewelfare system in Greece.96. Dealing with the very high unemployment rate is a major challenge. In late 2013, the authoritiesexpanded the criteria for providing unemployment assistance to the long-term unemployed, yet a largeshare of them remain ineligible for this extended assistance. The authorities have been implementingtheir employment action plan to address the social emergency on the basis of some key active labourmarket policies. There was an expansion of short-term and temporary public work programmes with50,000 positions mainly for the long-term unemployed, and subsidised internships of 45,000 youngjobseekers with private sector employers. A new round of temporary public work programme with atleast an additional 50,000 places and further youth internships, under a stricter monitoring and50
3. Programme implementationcontrolling legal and institutional framework to ensure avoidance of fraudulent behaviour, will beconsidered for 2014. The authorities are also implementing the reform of the Greek public employmentservice, which can be key to help many unemployed in finding their way back to the labour market. Agood roll-out of the Youth Guarantee scheme by December 2014 is of the greatest importance to reduceyouth unemployment and facilitate the much needed transition from school to work.97. A comprehensive review of social welfare and social protection spending is to be carried out byJune 2014. The purpose is to take stock of the full set of the various existing benefits gathering detailedinformation on a consistent and comparable way. Reviewing the effectiveness of the various benefits inreaching their target population and addressing their objective as well as identifying gaps in thecoverage of the current social protection system are other key objectives. Parts of this exercise areexpected to be carried out in conjunction with the social security review outlined in section 3.2.8.98. Profiting from the insight of that review, a strategy on social welfare and inclusion should beprepared in the second half of the year. The overarching objective is to increase the effectiveness ofsocial welfare spending. Existing benefits can be consolidated and streamlined with the intention ofcreating the fiscal space, within the programme fiscal targets and consistent with fiscal sustainability, toprovide targeted support for vulnerable groups with the strongest needs of income support and withcurrently no and very weak entitlement to social transfers. In the meantime, the government announcedinterventions in 2014 for income support for vulnerable at risk of extreme poverty, where householdswith annual taxable income below EUR 6,000 will benefit from the proposal.99. A guaranteed minimum income scheme is being created. It will start on a pilot basis in two areas ofthe country and a phased-in national roll-out should start in the course of 2015, depending on theavailability of financing. This sequential approach is justified by the need to develop and test thescheme on its various dimensions, ranging from eligibility criteria and selection beneficiaries, todetermination of benefits and the activation of the beneficiaries, to setting the administrativeinfrastructure, including an effective monitoring and controlling mechanism. An integration of theguaranteed minimum income scheme with other social benefits and services is envisaged. Beforeadvancing to the national roll-out, the pilot experiences will be evaluated by March 2015, to fine-tunethe design of the scheme. The World Bank is assisting the Greek authorities in the implementation ofthe pilots.3.5. CREATING FAVOURABLE CONDITIONS FOR ECONOMIC ACTIVITY100. Structural reforms are essential for a return to sustained growth and job creation. Substantialprogress has been made in key areas, including business environment, energy, transport, retail trade andregulated professions. These far–reaching reforms will support the economic recovery in the comingyears. As a result of this effort, the product market reform gaps to peer economies have narrowed inmany areas. At the same time, while Greece has advanced in product market reforms since the lastCompliance Report of July 2013, more needs to be done. This is the message from Greece'sperformance in two widely quoted country ratings: the OECD indicators on product market regulationand related dimensions and the World Bank Doing Business indicators (see Box 12). Further efforts areneeded to remove unnecessary restrictions and barriers to entry and competition and to cut red tape.Strong ownership and implementation of the reform agenda by the Government remains crucial toimprove economic prospects.51
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