ECONOMY

Green light from IMF on 4 bln euro loan tranche

The International Monetary Fund has approved the third review of Greece’s bailout program, agreeing to release a tranche of 4.1 billion euros as it welcomed an EU decision over the weekend to loosen loan terms for Athens.

That brings Greece?s total IMF funding disbursements to around 14.6 billion euros, part of the joint European Union-IMF joint rescue package totalling 110 billion euros.

The IMF said the Greece’s economic program has made further progress towards its key objectives of putting the economy on a path of sustainable growth by boosting competitiveness, strengthening financial sector stability and securing public finances.

“Greater emphasis on underlying reforms will be needed during the period ahead,» deputy managing director John Lipsky said in a statement late on Monday. «While the 2010 fiscal target was met, the strategy of under-executing the state budget to offset revenue shortfalls and overspending at subnational levels cannot be sustained.”

A spokeswoman also said the fund welcomed the commitment to extend maturities and lower interest rates under a new EU plan, adding that the new terms are essential in order to eventually restore Greece’s market access.