BUSINESS

IMF gives nod for twin bailout tranche

Assessment of Greece’s economic progress brings about disbursement of 3.25 bln euros to Athens By Tom Ellis

WASHINGTON – The International Monetary Fund’s executive board approved on Wednesday the disbursement of two pending bailout installments to Greece, which add up to 3.25 billion euros, following the completion of the first and second evaluations of the course of the Greek economy.

Sources say that these funds are set to be disbursed on Friday, while on Monday the Eurogroup of eurozone finance ministers is expected to green-light the disbursement of the January installment, amounting to 9.2 billion euros.

The successful completion of prior actions including Parliament’s vote on the tax bill and the appointment of a permanent general secretary for state revenues at the Finance Ministry helped to produce the favorable outcome at the board meeting, which had anyway been expected to be held in a good climate following the positive impressions Greece has been generating and the sense that, unlike in the past, it is implementing its commitments.

The decision will form part of the announcements that IMF Managing Director Christine Lagarde will make in Thursday’s first press conference for the year, while on Friday the Fund will issue its debt sustainability report on Greece. This will include the measures that need to be implemented in 2015 and 2016 as well as the funding framework to be followed from 2015 onward. It is also expected to clarify whether new measures will be required – which the government has rejected – and to what extent the IMF will accept the inclusion of projected revenues from beating tax evasion.

With the completion of its assessment of Greece’s economic progress, the IMF’s board also forgave the country for not fulfilling certain performance criteria originally scheduled for end-December 2012. The government should have completed a number of other actions (such as a great number of tax inspections), but the Fund acknowledged the extent of the work done and did not block the release of the twin disbursement.

IMF technical experts are already in Athens and are examining the course of implementation of prior actions ahead of the arrival of Poul Thomsen, the head of the Fund’s mission to Greece, in February.

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