Greece on right track after cuts in budget
By Derek Gatopoulos |
August 6, 2010, Friday
|
Print Edition
Print Edition
GREECE has made "remarkable" progress implementing an austerity program to tackle its debt crisis and is expected to receive the second installment of rescue loans next month, the International Monetary Fund and the European Union said yesterday.
They warned, however, that the country still faces significant risks and challenges.
Greece came to the brink of defaulting on its mountain of debt in May, and was saved by the first installment of a 110 billion euro (US$145 billion), three-year package of rescue loans set up by the IMF and by other EU countries using the euro.
In return, it has been pursuing a strict austerity program which has seen it cut civil service pay, trim pensions and increase taxes. The government's progress has been under quarterly review by the IMF, the European Central Bank and the European Commission, the EU executive.
"Our overall assessment is that the program has made a strong start," the organizations said a joint statement.
All end of June targets had been met, they said, "led by a vigorous implementation of the fiscal program, and important reforms are ahead of schedule. However, important challenges and risks remain."
Athens hopes to receive the second installment of loans - 9 billion euros - by September 13.
"I'm definitely confident that we are going forward with this disbursement," IMF official Poul Thomsen said during a joint news conference in Athens.
Athens received the first installment, 20 billion euros, in May.
Greece has pledged to reduce its deficit from 13.6 percent of gross domestic product last year to 8.1 percent at the end of 2010 and under 3 percent in 2014.
They warned, however, that the country still faces significant risks and challenges.
Greece came to the brink of defaulting on its mountain of debt in May, and was saved by the first installment of a 110 billion euro (US$145 billion), three-year package of rescue loans set up by the IMF and by other EU countries using the euro.
In return, it has been pursuing a strict austerity program which has seen it cut civil service pay, trim pensions and increase taxes. The government's progress has been under quarterly review by the IMF, the European Central Bank and the European Commission, the EU executive.
"Our overall assessment is that the program has made a strong start," the organizations said a joint statement.
All end of June targets had been met, they said, "led by a vigorous implementation of the fiscal program, and important reforms are ahead of schedule. However, important challenges and risks remain."
Athens hopes to receive the second installment of loans - 9 billion euros - by September 13.
"I'm definitely confident that we are going forward with this disbursement," IMF official Poul Thomsen said during a joint news conference in Athens.
Athens received the first installment, 20 billion euros, in May.
Greece has pledged to reduce its deficit from 13.6 percent of gross domestic product last year to 8.1 percent at the end of 2010 and under 3 percent in 2014.
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