The International Monetary Fund has backed the second €130-billion financial bailout for Greece by pledging a contribution of €28 billion, but said that the programme to keep the debt-ridden nation funded until 2014 carried exceptionally high risks.
The IMF Managing Director, Ms Christine Lagarde, has called upon the Greek Government to fully implement the structural reforms and austerity measures agreed with the European Union and the IMF in return for the assistance.
Greece’s European partners have committed to providing adequate support, during and beyond the programme period, for as long as it takes for the country to regain market access, provided the policies that have been agreed are implemented in full, Ms Lagarde said.
Full and timely implementation of the planned adjustment — alongside broad-based public support and support from Greece’s European partners will be critical to success, she said in a statement after the IMF board of directors on Thursday approved its share of the rescue package.
“Risks to the programme remain exceptionally high, and there is no room for slippages” the IMF chief said.
The IMF officially announced its contribution a day after the euro zone nations formally approved the second bailout package and ordered the release of the first instalment of €39.4 billion.
Euro zone finance ministers said they were satisfied with the steps taken by the Greek Government so far to implement the agreed reforms and spending cuts.
The IMF’s contribution will come from the Extended Fund Facility, which is designed for countries undertaking reforms to address deep-rooted structural weakness, the fund said.
It will be disbursed in equal tranches over a four-year period. The first tranche of €1.65 billion will be released immediately.