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The International Monetary Fund’s executive board approved the latest tranche of $2.26 billion late on Friday to cash-strapped Greece, while encouraging Greek authorities to speed up structural reforms.
The money is part of a bailout package agreed by the Washington-based crisis lender and eurozone countries with Greece.
IMF chief Christine Lagarde said that Greece was “well underway” to bring its government deficit under control and on track to meet 2013 fiscal targets. She called for “decisive steps” to reform government administration and reduce the state payroll.
“A critical priority is to tackle tax evasion by pressing forward rapidly with reform of the revenue administration to improve operational independence and make the burden of adjustment more equitable,” Lagarde said.
Greece has made “commendable progress” in restoring the country’s competitiveness, especially through wage flexibility, though measures to enhance productivity and liberalise business “need to be accelerated,” she said.
Following talks on Friday with Greek Prime Minister Antonis Samaras and Finance Minister Giannis Stournaras, Eurogroup chief Jeroen Dijsselbloem said he was happy with Greece’s efforts to rebuild its economy but that it must continue implementing structural reforms.
“We are very optimistic about the way the programme is being executed,” he said.
He said eurozone finance ministers would assess whether Greece deserves further debt relief in 2014.
Greece, currently in a sixth year of recession and an unemployment rate of more than 27 per cent, has been relying on emergency money from its international lenders since May 2010. In return, it has implemented a series of austerity measures, which include repeated tax hikes and cuts to pensions and salaries, along with structural reforms to make the country more competitive.
The latest IMF tranche is part of a joint package of financing with eurozone countries totalling 173 billion euros over four years.
The IMF statement said that Greece’s economic downturn was expected to “bottom out this year, with a gradual recovery taking hold in 2014.”
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