The radical adjustment programme initiated in 2010 based on strong fiscal consolidation, deep structural reforms and an internal devaluation to restore international competitiveness has sharply reduced Greece’s fiscal deficit, increased labour market flexibility and reduced labour costs. Shrinking domestic demand has also led to a substantial reduction of the current account deficit. Pension and health care reforms have strengthened longer-term fiscal sustainability. However, despite several revisions, the programme has failed to restore price competitiveness, growth and public debt sustainability. The fiscal contraction has deepened the depression. Economic recovery has been held back by the inability of the banking sector to supply credit and by persistent uncertainties related to the large public debt. Given the time it takes for structural reforms to bear fruit, robust and sustainable growth would be underpinned by faster product market reforms to accelerate price adjustment and foster the reallocation of resources towards more productive and export sectors. Moreover, a more efficient and modernised civil service is essential to improve the quality of and trust in public services, increase willingness to pay taxes, and to strengthen the rule of law, competitiveness, and foreign investment.