IMF board approves $4.6 billion in aid for Greece

Fri May 30, 2014 5:12pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

WASHINGTON (Reuters) - Greece is set to receive $4.6 billion from the International Monetary Fund after the institution's board on Friday signed off on the latest review of Greece's rescue package.

The disbursement comes after the IMF and Greece's European lenders finished analyzing Greece's progress under its 173 billion euro ($236 billion) bailout in March, ending six months of protracted negotiations. Greece last got an IMF aid disbursement in July 2013, of $2.3 billion.

The IMF has so far lent Greece about $15.8 billion under a four-year program, meant to help Athens recover from a sovereign debt crisis, rebuild its economy and return to markets.

Given the delay with the fifth review, Greece should get the equivalent of three more disbursements this year, spread out over any remaining reviews, the IMF said.

The Washington-based global lender praised Greece's progress in cutting its debt and bringing its primary budget into surplus ahead of schedule.

"Greece has gone from having the weakest to the strongest cyclically-adjusted primary fiscal balance in the euro area in just four years," Naoyuki Shinohara, deputy managing director at the IMF, said in a statement. The primary balance excludes interest payments and other one-off items.

"(But) public debt is projected to remain high well into the next decade, despite a targeted high primary surplus," Shinohara said.

Greece's budget surplus, announced in April, is a sign of the progress the euro zone country has made to fix its finances after four years of tough bailout-imposed austerity that wiped out almost a quarter of its GDP and sent unemployment to record highs of nearly 28 percent.

But the country's total debt is still about 175 percent of its annual economic output, a level economists consider as unaffordable in the long run. The IMF believes Greece must bring debt down to 110 percent of GDP by 2022 to keep it sustainable.   Continued...

 
IMF Deputy Managing Director Naoyuki Shinohara gestures during a news conference in Montevideo February 28, 2014.  REUTERS/Andres Stapff