Wall Street Journal
July 8, 2011
The International Monetary Fund on Friday approved the fifth tranche of its EUR30 billion loan program for Greece, intended to prevent the country from defaulting on its debt obligations and to avert sparking a fire sale in sovereign debt across Europe.
The IMF’s approval allows the immediate disbursal of EUR3.2 billion in cash from the fund, despite some board members’ concerns the program isn’t sustainable and without concrete details on how, exactly, its European partners will fund their share of the joint bailout totalling EUR110 billion.
New IMF Managing Director Christine Lagarde said that while Greece has made progress in implementing needed policy measures, many still need to be put into place and “significant policy challenges remain.”
“A durable fiscal adjustment is needed, lest the deficit get entrenched at an unsustainably high level, and productivity-enhancing reforms should be accelerated, lest growth fail to recover,” Ms. Lagarde said in a statement.
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