EU/IMF troika wraps up Greek mini-audit before major fall review [Update]

Inspectors from Greece's EU/IMF lenders have concluded a short, interim checkup of the country's performance under its bailout and will return for a more comprehensive audit in September, a senior Greek finance ministry official said on Wednesday.

The scheduled week-long visit by inspectors was an unusually low-profile one to review the pace of reforms and lay the ground for the more crucial audit on fiscal targets and funding gaps in the fall, when talks on new debt relief are also expected to begin.

“We had constructive talks, they wanted to take stock of where we are in terms of the [bailout] program. We decided to start our next review in September,” said a senior finance ministry official, declining to be named.

The two sides held talks on privatizations, structural reforms to make the economy more competitive, tackling bad loans burdening banks and the state of public finances; but no major decisions were taken.

EU officials in recent weeks have raised alarm that Greece is slowing down on the reform front after the opposition, anti-bailout SYRIZA party won the country's EU election in May.

Prime Minister Antonis Samaras has also promised austerity-weary Greeks gradual tax relief as Athens expects to post another budget surplus before debt servicing costs, but that has not yet won the backing of EU/IMF lenders.

Athens needs to push through a set of six reforms, including merging auxiliary pension funds, to qualify for its next tranche of 1 billion euro in aid but so far has only managed one - passing a law to privatize major power utility PPC.

“August will be a month of tough work for us, there is a list of issues that we need to speed up,” the official said. “There are a few remaining milestones.”

Bailed out twice with 240 billion euros, Greece's fortunes have revived sharply in recent months, helping it raise 4.5 billion euros in bond issues since April after a four-year exile from debt markets. But analysts say the country is not out of the woods yet, given fragile political stability and the prospect of early elections later this year or next year. [Reuters]