Titled “National Priorities for Structural Reforms in Europe”, the report outlines how a broad range of structural weaknesses continue to constrain productivity and long-term growth across the continent — with Greece receiving special attention due to its lingering vulnerabilities.
The IMF acknowledges that Greece has made progress since the financial crisis, but stresses that the country still faces persistent challenges in several critical areas. These include the efficiency of its justice system, the performance of its public administration, the functioning of its labor market, and the pace of innovation. Without significant reform in these sectors, the report suggests, Greece will struggle to fully converge with its EU peers.
Among the areas in need of urgent improvement, the IMF places particular emphasis on the judicial system, where delays in legal proceedings and lack of predictability discourage investment. Public administration is also highlighted as overly bureaucratic and inefficient, hampering the delivery of services and the ease of doing business.
The labor market presents another major obstacle, with low participation rates among women, young people, and older workers. At the same time, the education and training systems are not equipping the workforce with the skills needed in a rapidly changing economy. Innovation, digital transformation, and support for research and technology remain underdeveloped, limiting Greece’s potential to compete in the knowledge economy. Finally, the regulatory environment for businesses is seen as overly complex, creating unnecessary administrative burdens and stifling competitiveness.
The IMF estimates that if Greece successfully implements reforms in these areas, it could boost its GDP by around 5% over the medium term. More importantly, such reforms would help the country move closer to the standards of the more developed EU economies. However, the report also underscores that technical capacity, political will, and social consensus are crucial for reform efforts to succeed — none of which can be taken for granted.
Zooming out to the broader European context, the IMF notes that despite years of integration, structural issues remain a drag on productivity across much of the continent. Labor market inefficiencies, mismatched skills, outdated tax systems, and over-regulation are common problems. These challenges are particularly acute in regions such as the Western Balkans and Central and Eastern Europe, where the potential gains from reform could raise GDP by as much as 9% and 7% respectively.
The IMF highlights the importance of fiscal reforms that can improve the management of public resources and ensure the long-term sustainability of pensions and public investment. It also points to the need for better governance and faster, more transparent justice systems — particularly in Southeastern Europe and the Balkans — to attract investment and strengthen public trust.
Still, the report cautions that implementing structural reforms is politically and technically difficult. Many European countries face resistance to change, and building social acceptance for reform requires clear communication and consensus-building. In its conclusion, the IMF argues that a coordinated push at both national and EU levels — including a stronger Single Market and progress on the Capital Markets Union — could magnify the benefits of reform and enhance Europe’s long-term competitiveness and resilience.
