Tuesday, 13 September 2016

EU/IMF creditors start review of Greece’s progress on reforms

In World Economy News 13/09/2016

Greece’s creditors began assessing on Monday the country’s progress on reforms prescribed in its international bailout programme, a key step before releasing 2.8 billion euros (£2.3 billion) in additional financial aid.
The left-led government had promised to take measures to liberalise its energy market, cut pension spending, speed up privatisations and boost banking governance in exchange for the fresh funds, which will be used to pay off state arrears.
The meetings between Greek government officials and European mission chiefs on Monday focused on the operation of a new privatisation fund which is to speed up the sale of state assets and also on actions needed to tackle political corruption.
Euro zone finance ministers urged Athens on Friday to step up its reform efforts.
The current assessment is the final step for the conclusion of Greece’s first review under its 86-billion euro bailout deal. Athens received 7.5 billion euros in bailout aid in June after adopting a series of painful pension and tax reforms.
It is also the prelude to the second bailout review, which entails an unpopular loosening of labour laws.
The “quartet” of mission chiefs from the European Commission, the European Stability Mechanism, the European Central Bank and the International Monetary Fund is expected to return to Athens in October for those talks.
Greece wants to successfully conclude both assessements in order to win more debt relief and qualify for participation in the European Central Bank’s quantitative easing programme.
It believes that those moves would help it regain investors’ confidence and tap bond markets again.
During his speech at an annual news conference on Sunday, Greek Prime Minister Alexis Tsipras said a rift between the IMF and the EU over how to make Greece’s debt sustainable was damaging Greece’s attempts at economic recovery.

Source: Reuters (Reporting by Renee Maltezou; Editing by Gareth Jones)