EU, IMF approve Greece aid but urge faster reforms | Business| Economy and finance news from a German perspective | DW | 11.02.2011
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EU, IMF approve Greece aid but urge faster reforms

The EU and IMF said debt-choked Greece has made enough progress to receive an additional 15 billion euros in aid but warned the country needed to speed up economic and financial reforms.

A police officer demonstrating in Athens

Greece's austerity drive has sparked anger and protests in the country

Representatives of the International Monetary Fund (IMF), European Commission and the European Central Bank gave the go-ahead on Friday for a new 15-billion-euro ($20.4 billion) tranche of aid for Greece but insisted that Athens needed to accelerate reforms to meet the targets of its bailout deal.

"While there have been some delays and shortfalls, it should not undermine the fact that the program is broadly on track," Poul Thomsen, head of the IMF's Greece mission, told a news conference in Athens on Friday. "We are ready for the second phase of the program, having successfully pulled the economy from an abyss."

Under the terms of the latest fund transfer, the EU will provide 10.9 billion euros and the IMF 4.1 billion euros.

Greece has work cut out

The officials were in Athens to review Greece's progress under a 100 billion euro EU-IMF bailout agreed in May last year to save it from bankruptcy. It was the first bailout ever agreed to rescue a eurozone member in a crisis that spilled over to Ireland and threatened Portugal and Spain.

EU and Greek flags flying in front of the Greek national bank

Greece is about to cash a set of checks worth 15 billion euros

The three international lenders insisted on Friday that Athens needed to ramp up structural reforms in areas such as tax administration and healthcare to secure lasting recovery.

They also called for a massive privatization program worth $50 billion to be completed by 2015.

"We see there are three very important sources for privatizations - listed and unlisted companies, the assets the government has in these companies, and commercial real estate," the EU's mission chief Servaas Deroose said in Athens. "To help reduce public debt and support higher investment and growth, it is essential to scale up privatizations."

Greece has slashed public spending, frozen pensions and increased taxes in a bid to get its financial house in order. But the austerity drive has prompted a flurry of strikes and angry protests in the country.

Author: Sonia Phalnikar (AFP, Reuters, DPA)

Editor: Sean Sinico

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