By Nick Mann | 15 April 2013
Greece is set to receive another tranche of bailout funds after reaching agreement with the ‘troika’ of international lenders on the direction of its adjustment programme.
In a joint statement issued this morning, the European Commission, European Central Bank and International Monetary Fund said their teams on the ground in Greece had agreed ‘the economic and financial policies needed to ensure the programme remains on track to achieve its objectives’
‘Fiscal performance is on track to meet the programme targets, and the government is committed to fully implement all agreed fiscal measures for 2013/14 that are not yet in place, including adoption of legislation to extend collection of the real estate tax through 2013 via the Public Power Company,’ they said.
In particular, they welcomed the ‘important progress’ that had been made in improving tax and revenue collection by giving the revenue authorities more power and autonomy. ‘This was a major focus of the mission, given the importance of improving tax collection and reducing the scope for evasion and corruption in order to ensure a more balanced and fair distribution of adjustment and to support the achievement of fiscal targets and minimise the need for further adjustment measures,’ the statement noted.
Greece is also ‘nearing completion’ of the full recapitalisation of its banking sector, it added.
Today’s agreement marks the conclusion of the third review of the Greek economy by the troika since eurozone finance ministers agreed a fresh €49.1bn bailout package for the ailing economy in December. Greece had been in line to receive a €2.8bn loan tranche under this deal last month, but this was delayed due to unspecified issues.
In the latest statement, the troika said the ‘recent steps’ taken by the Greek authorities ‘suggest that the March milestones are likely to be achieved in the near future’. This meant the €2.8bn ‘could be agreed soon’ by the other eurozone countries.
They also concluded that Greece was ‘on track’ to achieve debt sustainability. Implementing the bailout programme in full, as well as potentially being able to call on further assistance from other eurozone countries, ‘should help to ensure the long-term sustainability of Greece’s public debt,’ the statement said.
Formal approval of the troika’s review by the IMF’s executive board and eurozone members is expected in May.
