Greece, which has been under an internationally coordinated adjustment programme since 2010, has made impressive headway in cutting its fiscal deficit and implementing structural reforms to raise labour market flexibility and improve labour competitiveness. Shrinking domestic demand has also led to a substantial reduction of the current account deficit. Slow product market reforms held back price competitiveness and exports in the recent past, but there are signs that the fall in unit labour costs has started to pass through to export prices and competitiveness. The depression has been much deeper than expected, which has undermined debt sustainability, induced a dramatic rise in unemployment, which affected more than 27% of the labour force at mid-2013 and raised social tensions, especially in the first years of the programme. Economic growth is held back by weak domestic and global demand, difficult access to credit and limited macroeconomic policy room for manoeuvre. The fiscal stance will remain restrictive, although less so in 2014 than in recent years. Encouraging economic developments in mid‑2013 related, inter alia, to a good tourism season, which are expected to continue through 2014, mitigate the risks to growth. However, these risks are still on the downside. Together with the additional adjustment needed on the fiscal side and price competitiveness, the need for further assistance to achieve fiscal sustainability cannot be excluded.