Greece's reform pace needs a boost to spur growth -Commission

Reuters

* EU Task Force praises Greece on taxes, asks for morereforms

* Commission to soon clear motorway construction projectsworth billions

* EU mulls more aid for underfinanced Greek companies

BRUSSELS/ATHENS, Oct 22 (Reuters) - Greece has made progressin tackling fiscal problems but needs to accelerate theimplementation of structural reforms and raise the efficiency ofpublic administration to spur growth, the European Commissionsaid on Tuesday.

Athens has been on an international financial life linesince 2010, with loans granted in exchange for spending cuts andreforms. After more than three years of painful economicadjustment the government has repeatedly ruled out imposing newausterity measures on a nation now in its sixth year ofrecession.

The Commission, together with the International MonetaryFund and the European Central Bank, have stressed the importanceof speedy structural reforms to help the country to recover.

In a report, released in Brussels, the Commission pointed tothe need for a well functioning tax system, a reform of centralpublic administration and the creation of a supportive andpredictable business environment.

"Growth and job creation can only come from thrivingcompanies with easy access to liquidity and markets," an EU TaskForce of about 60 EU officials advising Greece said in its FifthActivity Report on Greece.

Greece, expected to return to growth next year, is currentlyat odds with international creditors over the size of thecountry's budget gap next year, prompting talk that Athens mightbe forced to adopt new austerity measures.

"It would be a great pity if all the sacrifices the Greekpeople have made in the last years would not lead to success," asenior European Commission official told reporters at a briefingin Athens.

In a bid to unlock badly-needed investment to reviveGreece's ailing economy, the Commission is expected to clear bythe end of the year four big toll-road construction projectsworth 7.6 billion euros ($10 billion), the report said.

The projects have been suspended for three years as both thegovernment and concessionaires, including Germany's Hochtief and France's Vinci, had sought terms to berevised to take account of Greece's crisis.

Resumption of the EU-cofinanced projects would reviveinvestment, which has slumped by a total 61 percent in thecountry's 2008-2013 recession and is expected to drive a modesteconomic recovery of 0.6 percent next year.

The Task Force is also trying to help Greece unlock more EUfunds and loans to provide finance to struggling smallcompanies, which have been effectively shut out of Greece'sbanking system.

Despite record low interest rates by the European CentralBank, Greek businesses' borrowing costs have hit a recordaverage level of 6.6 percent, according to government estimates.

"Perhaps there needs to be a more comprehensive approach tohelp small and medium enterprises," the EU Commission officialsaid. "They're the backbone of the Greek economy". ($1 = 0.7312euros)

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