Greece: IMF approves next tranche of bailout funds for Greece

30th Jul 2013

The IMF has announced that it plans to release the next installment of bailout funds to Greece. Athens passed its latest review, but the IMF warned it must do more to implement reforms in light of looming shortfalls.

The International Monetary Fund (IMF) approved the latest tranche of rescue funds to Athens worth 1.7 billion euros ($2.3 billion) after the debt-stricken country had successfully passed its fourth review, according to a statement  issued on Monday. Once the latest installment arrives, Greece will have received a total of roughly 8.24 billion euros from the Washington-based organization since 2012.

Despite the implementation of harsh austerity measures, the IMF announced that Greece must work harder to stabilize its economy.

“Progress on institutional and structural reforms, in the public sector and beyond, has still not been commensurate with the problems facing Greece,” Christine Lagarde said on Monday.

“Greater reform efforts remain key to an economic recovery and lasting growth,” Lagarde added.

Since agreeing to bail Greece out in 2010, the European Commission, the European Central Bank and the IMF have disbursed about 240 billion euros in their coordinated effort towards the country. In a separate 2012 program, the IMF agreed to provide Greece with 28 billion euros in aid over a four-year period.

Shortfall projected

The European Commission – which itself recently approved a tranche worth 2.5 billion euros to Athens – echoed the IMF’s warning on Monday in a new report. It projected that Greece’s budget deficit would exceed the official target by 1.75 and 2 percentage points of annual GDP in 2015 and 2016, according to a report issued by the EU executive on Monday.

“Greece continues to make overall, albeit often slow, progress … with several important actions being delayed,” the Commission’s report read.

A senior EU official speaking on condition of anonymity told the news agency AFP that a shortfall of about 3.8 billion euros was projected for Greece by late next year.

Last Thursday, Greek lawmakers approved a new law which subjects 4,200 public-sector employees to involuntary transfers and possible dismissals. They also promised to cut an additional 15,000 jobs by the end of the year in a bid to reduce costs.

Amid other painful cuts to pensions and the implementation of tax hikes, unemployment in Greece has risen to nearly 27 percent.

kms/jm (AP, AFP, Reuters)

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