Saturday, February 12, 2011

IMF Demands More Change in Greece

Wall Street Journal
February 11, 2011

Greece's international lenders of last resort said Friday the country has made enough progress to receive an additional €15 billion ($20.4 billion) aid tranche but needs to accelerate economic changes and commit large-scale privatizations.

"The program is broadly on track stabilizing the economy but serious challenges exist for the creation of fiscal sustainability," said Servaas Deroose, mission chief for the European Commission, the European Union's executive arm.

Representatives of the International Monetary Fund, European Commission and the European Central Bank were speaking at a joint press conference in Athens on their third mandatory progress review, which green-lighted the provision of the additional funds in due course. The EU will provide €10.9 billion and the IMF €4.1 billion.

The three international lenders—known locally as the troika—insisted that the country must commit to a massive €50 billion privatization program to be completed by 2015. The funds will be used to reduce Greece's mountains of national debt that top €330.1 billion. To date, the socialist government had only committed to €7 billion-worth of privatizations.

"This is a very ambitious program but we are at a critical juncture where we need to accelerate reforms. In some cases some things are not going as fast as expected due to technical complexity and social sensitivity," said Poul Thomsen, IMF mission chief.

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