Greece eyes fresh aid payout as EU/IMF visit ends
Wed Aug 4, 2010 1:32pm GMT
ATHENS (Reuters) - Greece should qualify for a fresh 9 billion euro payment from its bailout fund once IMF and EU inspectors wrap up a visit the country expects to end on Thursday with a qualified thumbs-ups for its efforts to exit a debt crisis.
But the fresh handout, which is due next month, may come with calls to speed up energy sector reforms and the government's ongoing privatisation programme, local media and officials said.
Dubbed the 'troika', the team from the IMF, European Commission and European Central Bank is assessing Greek progress in cutting the deficit and pushing labour market and other reforms before releasing the second tranche from the 110 billion programme.
"So far, it seems we are meeting our targets and responding to the obligations, faster than the original timetables," Labour Minister Andreas Loverdos told reporters on Wednesday. "This is what the troika verified during our meeting."
They are expected to present their findings during a news conference on Thursday.
Government officials said they were expecting the team to report positively on state spending cuts, which were above target and could offset lower than expected revenues. They said they would redouble efforts to fight tax evasion.
"There will be reference to the need to liberalise the energy market. They are especially worried about the situation at hospitals, local government and state companies because of their debts," a senior government official told Reuters on condition of anonymity.
Greek media reported the team had also asked Greece to sell parts of state utility PPC and deal with its loss-making rail operator, both entities with strong labour unions that have already opposed the reforms.
State hospitals, municipalities and state-owned companies have long been burning holes in the budget and the government is introducing better controls, such as appointing managers and accountants.
Athens is optimistic it will be able to cut the budget deficit to 8.1 percent of GDP this year from 13.6 percent in 2009, after slashing wages and salaries and hiking taxes in the face of a brutal downturn.
Greece plunged into its first recession in 16 years in 2009 and GDP is expected to shrink by a further 4 percent this year.