ECONOMY

Troika clears fifth bailout tranche

Greece?s creditors are expected to release the fifth tranche of money from the 110-billion-euro support package next month after European Commission, European Central Bank and International Monetary Fund representatives visiting Athens expressed their satisfaction with the country?s progress, according to a statement they released late on Friday.

The Finance Ministry had confirmed a few hours earlier that the monthlong visit by the troika mission to Athens has ended with an agreement with the Greek government on a series of reforms that will likely be announced early next week. They will concern the midterm fiscal plan and the planned privatizations.

?The mission has reached staff-level agreement with the authorities on a set of economic and financial policies needed to meet program objectives. Strict implementation of these will help to restore fiscal sustainability, safeguard financial sector stability, and boost competitiveness to create the conditions for sustained growth and employment,? the troika statement suggested.

?Building on the agreed comprehensive policy package, discussions on the financing modalities for Greece?s economic program are expected to take place over the next few weeks. Once this process is concluded and following approval of the IMF?s Executive Board and the Eurogroup, the next tranche will become available, most likely, in early July,? it added.

The troika suggested that significant progress has been made in the area of fiscal consolidation, although it noted more fiscal and structural reforms are needed to reduce the budget deficit and improve the business climate.

The mission recognized that the recession last year was worse than anticipated, but it expects the economy to stabilize at the turn of the year, identifying as encouraging signs the ?notable pickup in exports? and the declining inflation.

?The government has committed to an ambitious medium-term fiscal strategy that will enable it to maintain its 2011 and medium-term fiscal targets. This strategy includes a significant downsizing of public sector employment, restructuring or closure of public entities, and rationalization in entitlements, while protecting vulnerable groups,? it stated.

The troika also confirmed that tax exemptions will be reduced and property taxation will rise, with greater efforts to beat tax evasion. Athens will create a privatization agency to be professionally and independently managed, with quarterly and annual targets set aimed at realizing revenues of 50 billion euros by 2015, the statement noted.