Greece To Receive $2.3bn IMF Bailout Payment

The International Monetary Fund on Monday approved a further 1.7 billion euros ($2.3 billion) in aid payments to Greece after completing a review of the country’s finances, but warned Athens must do more to implement reforms in light of looming shortfalls.

Greece last week adopted the last piece of legislation its international lenders required to release the lastest batch of rescue loans, after two months of wrangling over unpopular measures to overhaul the economy.

The International Monetary Fund on Monday approved a further 1.7 billion euros ($2.3 billion) in aid payments to Greece after completing a review of the country’s finances, but warned Athens must do more to implement reforms in light of looming shortfalls.

Greece last week adopted the last piece of legislation its international lenders required to release the lastest batch of rescue loans, after two months of wrangling over unpopular measures to overhaul the economy.

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The total funds from the so-called troika – IMF, the European Commission and the European Central Bank – for this tranche window now stands at 5.8 billion euros.

Greece’s public finances have been kept afloat since 2010 by a rescue loan programme funded by the troika set to reach 240 billion euros.

After two bailouts, Greece still faces a funding shortfall of some 3.8 billion euros in 2014 but a senior EU official, who spoke to the AFP on the condition of anonymity, said international creditors are not overly concerned as the current bailouts are financed through mid-2014.

“The Greek authorities have continued to make commendable progress in reducing fiscal and external imbalances,” IMF Managing Director Christine Lagarde said in a statement. “However, progress on institutional and structural reforms, in the public sector and beyond, has still not been commensurate with the problems facing Greece. Greater reform efforts remain key to an economic recovery and lasting growth.”

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In exchange for international aid, Athens has had to implement draconian austerity measures, including drastic cuts to pensions and civil service payrolls while the economy has remained stuck in recession for six years and unemployment at a high of 27 percent.

Greece’s Prime Minister Antonis Samaras on Monday urged European leaders to shift economic policies toward generating growth as the recession was hurting the government’s efforts to reduce debt. It was “worsening problems that we must solve and complicating reforms which we must complete,” he said.

In a show of solidarity, Italian Prime Minister Enrico Letta, on a visit to Greece, rebuked Europe for its handling of the Greek bailout, saying the harsh conditions imposed on Athens had made it harder for the country to recover.

“There is no doubt that serious mistakes were made about Greece by Europe in the past few years. The timing was wrong. The instruments were wrong. The interventions were not made in the right way and at the right time and this worsened the crisis,” he said.

“The crisis would have been different. It would have created less of a financial disaster, it would have led to fewer job losses across Europe if Europe’s attitude to Greece had been different at the beginning.”

Italy, with a public debt burden second only to Greece’s in the eurozone as a proportion of its overall economy, has also suffered severely as successive governments have struggled to get its battered public finances in order.

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