The European Commission will stand over and watch the Greek government implement fiscal cuts and overhaul their statistics, according to their much-awaited assessment out today. But they have issued no threat should Greece fail to comply.

The EC wants the Greek budget deficit brought below 3 per cent of GDP by 2012. To achieve this will require reliable statistics, a “comprehensive structural reform package”, and significant budget cuts to hit economic targets along an “adjustment path”. Greece needs to submit an action plan and calendar by mid March, and also needs, by May 15, to legislate to enforce monthly budgetary reporting and most importantly, ‘effective personal responsibility’. (There are few governments that wouldn’t benefit from that.) The EC is also starting ‘infringement proceedings’ against Greece for ‘failing in its duty to report reliable budgetary statistics’ – this is the strongest wording in the text.

The recommendations – drastic cuts and numbers we can trust – are sensible. But there are a few issues. The first is apparent toothlessness: Read more