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Greece is "making progress" in overcoming "deep-seated problems", the International Monetary Fund said on Monday, before adding that Athens must still find a way to get the economy growing again after years of recession.
"Progress on fiscal adjustment has been exceptional by any international comparison," the IMF said in a regular report capping the visit of an audit team as part of the country's bailout programme.
"Greece has also made a significant dent in its competitiveness gap," the report said.
But the IMF stressed that "restoring growth remains the overarching precondition for whether Greece succeeds" in its bailout programme with the IMF and European Union, and much work remains to be done especially in terms of structural reforms.
"Insufficient structural reforms" have meant that deficit-cutting has been achieved primarily through slashing jobs and salaries and has brought "unequal distribution of the burden of adjustment," the IMF said.
The IMF added that "very little" had been done to tackle Greece's "notorious tax evasion," with the rich and self-employed "simply not paying their fair share" as austerity unfairly hits workers earning a regular salary or a pension.
In a speech last month, Poul Thomsen, the IMF official in charge of the Greek programme, pointed to tacit corruption in a tax service that "has too many employees who have gotten their jobs because of political connections."
Greece also suffers from too many closed professions, the Fund said, a reality that it believed also unfairly hits salary earners not protected by special regimes that limit hiring and firing.
Since 2010, the European Union and International Monetary Fund have committed a total of 240 billion euros ($317 billion) in rescue loans to Greece.
Greece was obliged to adopt a strict austerity programme, including drastic salary and pension cuts, as part of its two EU-IMF bailout deals.
On Friday the European Union forecast that Greece would end six years of recession in 2014 with growth of 0.6 percent, in line with an earlier forecast by the IMF.
But despite the prediction for expansion next year -- following a recession forecast of minus 4.6 percent this year -- the IMF warned that attempts to "artificially" stimulate growth should be resisted.
"International evidence is mixed at best on the usefulness of development banks, tax free zones, and subsidies targeted at specific sectors," the report said.
"In particular", it added, Greece "cannot afford a more complicated tax system."
The IMF urged Greece to streamline its massive public sector that privileges older and often inefficient workers and denies the young a chance at entering the work market.
"The taboo against mandatory dismissals must be overcome, the IMF said in the report.
In his speech, Thomsen said he found it "astonishing that it is still somewhat of a taboo to make room for new ... employees by dismissing even those who do not bother to show up for work," especially "considering that Greece has youth unemployment of more than 60 percent."
Last month, the Greek parliament voted to adopt a law that will allow the dismissal of 15,000 civil servants.