Greece to Return to Growth in 2014, Predicts Troika
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Greece has reached an agreement with international creditors on its economic recovery efforts, paving the way for the disbursement of 8.8 billion euros in bailout money as well as a return to growth in 2014.
Speaking at a nationally televised address, Greek prime minister Antonis Samaras on Monday confirmed that a deal was reached and said it translated into 2.8 billion euros ($3.7 billion) in bailout loans pending since March and “opened the way” for another 6 billion euros scheduled in May.
Greece has reached an agreement with international creditors on its economic recovery efforts, paving the way for the disbursement of 8.8 billion euros in bailout money as well as a return to growth in 2014.
Speaking at a nationally televised address, Greek prime minister Antonis Samaras on Monday confirmed that a deal was reached and said it translated into 2.8 billion euros ($3.7 billion) in bailout loans pending since March and “opened the way” for another 6 billion euros scheduled in May.
The move follows a review by delegates from the International Monetary Fund, European Commission and European Central Bank, known collectively as the troika, and is part of a regular process under which Greece receives installments of its multi-billion euro bailout.
The troika has committed a total of 270 billion euros in bailout loans to Greece since 2010, with Athens obliged to overhaul its national economy and adhere to a strict regime of spending cuts and tax hikes.
On Monday, finance minister Yannis Stournaras revealed that part of the agreement included dismissals for “several thousand” public- sector employees, which will allow the country to hire younger staff on less wages and more flexible contracts.
The firings are “targeted at disciplinary cases and cases of demonstrated incapacity, absenteeism and poor performance, or that result from closure or mergers of government entities,” explained Stournaras, adding that 200,000 people left the Greek state sector between 2009 and 2012.
The IMF’s mission chief to Greece, Poul Thomsen, welcomed the agreement on redundancies in the civil service.”I am very pleased that the government is making a particularly determined effort in this area,” he said. “It has always been a surprise to me … that it’s been such a political taboo to get rid of people who underperform.”
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Thomsen also praised Greece’s progress in fiscal adjustment and said that the country should be able to meet its overall budget targets and return to growth gradually in 2014.
“Greece has indeed come a very long way,” he said.
Stournaras said he expected Greece to achieve a primary budget surplus – the surplus before taking into account debt financing costs – this year even though recession will be deeper than projected, with the economy forecast to shrink by about 5 percent before starting to recover in 2014.
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