EU: Greece ahead of the curve
Greece is ahead of schedule in meeting its deficit-cutting commitments and making structural reforms, putting the country back on track to secure the next loan installment, the European Commission said yesterday. Deficit cuts «are going even faster than planned,» Commission spokesman Amadeu Altafaj Tardio told reporters in Brussels. «Greece is on track to meet its commitments» as part of a «very ambitious» and «very demanding» program, he said. Greece’s goal is to reduce the budget deficit from 13.6 percent of gross domestic product last year to within the European Union’s limit of 3 percent by 2014. Prime Minister George Papandreou in May committed to further wage cuts and tax increases on alcohol, fuel and tobacco in return for 110 billion euros in emergency loans from the International Monetary Fund (IMF) and European Union to stave off a default. Some 20 billion euros was handed over in a first tranche. European finance ministers are expected to approve the second tranche, which totals 9 billion euros – 6.5 billion from the eurozone and 2.5 billion from the IMF – when they meet on September 7, the European Commission said. Greece is expected to receive the money 24 hours later. «Greece has managed impressive budgetary consolidation during the first half of 2010 and has achieved swift progress with major structural reforms,» European Economic and Monetary Affairs Commissioner Olli Rehn said. The assessment followed a mission by experts from the European Commission, the European Central Bank and the IMF to Athens earlier this month to assess the progress made by Greek authorities in slashing a huge public deficit. The audit mission had concluded that Athens had made «considerable progress in a vast array of areas» but that «key challenges» remained. Rehn also found that «despite the significant progress made, challenges and risks remain. The main immediate challenge is to safeguard adequate liquidity and financial stability of the banking sector,» he said. «At the same time, the structural reform agenda needs to be pressed ahead to unleash the huge potential for raising growth.» The loan for Greece will not be held up by objections from Slovakia, the Commission said. Slovakia’s parliament rejected the nation’s participation last week, ending the EU’s unity in handling the sovereign-debt crisis. The Slovak government opposed the aid, saying poor countries shouldn’t pay for the profligacy of richer peers.
