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March 1, 2021

IMF gives Greece more ‘Credit’

The IMF’s Executive Board approved December 17 the disbursement of about EUR 2.5 billion to Greece as part of the three-year lending arrangement that was agreed in May 2010, according to official website, imf.org. The IMF loan is part of an international rescue package worth EUR 110 billion, of which the European Union is providing EUR 80 billion and the IMF the remaining EUR 30 billion. The Greek government has made good progress on its reform agenda. After six months of intense reform efforts, there are signs that competiveness is improving, helped by a slowdown in underlying inflation and wage growth. Budget measures implemented since the start of the program have reduced the deficit by an estimated 6 percent of GDP in 2010 alone. On top of that, the pension reform approved in July implies large long-term fiscal benefits and improved labor supply. But market sentiment toward Greece remains volatile. The economy is still adjusting, and unemployment is rising. A key test will be the implementation of additional structural reforms to boost growth and create new jobs. The Deputy Managing Director of the IMF Board, Murilo Portugal, declared the Greek government should be given credit for working to make progress on the austerity measures, seeing the competitiveness of the Greek economy improve and the inflation go down. In an interview, Poul Thomsen, head of the IMF’s team, discusses the challenges involved in restoring the overall health and competitiveness of the Greek economy. “Greece has made a good deal of progress, completing a first wave of fiscal adjustment and reforms, including a landmark pension reform. The economic program is now at a crossroads” he also said. Pn the other hand, novinite.com announced that Prime Minister George Papandreou has proposed the start of a campaign to collect up to a million signatures in favour of an official discussion within the European Union on a new and revised Lisbon Treaty.

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