EU, IMF approve Greek aid, demand faster reforms

The bailout was the first ever agreed to rescue a euro zone member, in a crisis that has sent shockwaves throughout the bloc

EU, IMF approve Greek aid, demand faster reforms

EU and IMF inspectors gave the green light on Friday for a new 15 billion euros tranche of aid for Greece but said progress was too slow and urged Athens to speed up reforms to meet the targets of its bailout deal.

Greece has slashed public spending, frozen pensions and increased taxes under the terms of the 110 billion euros ($149.1 billion) bailout agreed in May last year to save it from bankruptcy, but was told on Friday it must do more.

"The program is on track but it will not remain on track without a significant, broad-based acceleration of reforms," said IMF mission chief Poul Thomsen.

The officials were in Athens to monitor the debt-choked country's progress on the path towards tidying up its finances and opening up the economy.

In November, when the previous aid tranche was handed over, the lenders sounded more positive, saying that although Greece technically missed full-year targets due to statistical revisions, it had made a huge fiscal effort and met third quarter cash targets -- on which the aid tranche depended.

The bailout was the first ever agreed to rescue a euro zone member, in a crisis that has sent shockwaves throughout the bloc, spilling over to Ireland and threatening Portugal and Spain.

Many analysts believe Greece will not be able to handle its debt mountain when the three-year bailout ends and will need to restructure its debt at some point.

EU, IMF and Greek officials have ruled out restructuring but agree that something needs to be done to help Greece tackle a borrowing hump in 2014/2015. They are examining various options, including extending bailout loan repayments and helping Greece buy back its debt.

The 15 billion euro aid tranche must now be approved by euro zone finance ministers and the IMF board. Greece has already received 38 billion euros in aid.

Reuters

Last Mod: 11 Şubat 2011, 16:47
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