ECONOMY

EU-IMF plan may be prolonged

The terms of the rescue loan provided by the International Monetary Fund and the European Commission to Greece may go beyond 2012 in the event that the country cannot borrow from capital markets, according to the Foundation for Economic and Industrial Research (IOBE). In a quarterly report issued yesterday, think tank IOBE called on the government to closely stick to the IMF-EU memorandum without, however, considering it a panacea for all its problems. It also recommended that the measures be implemented through 2020 and that reforms be pushed through immediately to allow them to create «positive surprises» – able to spur growth of 10 percent in gross domestic over the next five years. The 110-billion-euro package has pulled Greece back from the dangerous brink of bankruptcy for the time being, added the report. But if markets continue to show little confidence in Greece after 2012, then it is very likely that the country will need to extend the loan period by an additional three years in order to avoid restructuring its debt. IOBE adds that one of the conditions necessary for the memorandum to be correctly implemented is for the country’s leaders to show the required political will. At several junctures in the report, IOBE points out that in order for Greece to leave the fiscal crisis, several initiatives exhibiting leadership need to be taken by the country. Essentially, it calls on the government not to backtrack on the austerity measures and for opposition parties to support the measures.