Economic figures to be inspected

It emerged yesterday that the International Monetary Fund had warned the previous government last spring that drastic action was needed to avoid an economic crisis. Meanwhile, officials from the IMF, the European Commission and the European Central Bank are due to conduct checks today at ministries in Athens to see whether Greece is meeting its economic targets. The foreign officials will check to see if there is any danger that a series of factors, such as hospital debts, companies’ value-added tax returns, the funding of the social security fund or the imbalanced budgets of public utilities could lead to Greece failing to make the savings it needs to. Another inspection is due at the end of the month, when Greece will receive 9 billion euros in loans from its eurozone partners and the IMF, which will be the second tranche of the 110-billion euro package it signed up to earlier this year. This week’s visit comes after Sunday’s Kathimerini revealed that the IMF had warned the New Democracy government last spring, in a special note known as an «early warning exercise,» that the Greek economy was heading for disaster. The IMF expressed concern about Greece’s plummeting competitiveness and its pronounced fiscal imbalances, even though at that stage the true size of Greece’s deficit was not known. The Fund called on the government to take immediate action to rectify the situation and warned that the Greek bond spreads would soar and the country would pay a high cost to borrow on international markets. Under the premiership of Costas Karamanlis, the conservative administration did not take any remedial steps. In fact, in his campaign for the October general elections, Karamanlis only went as far as promising to freeze public sector wages and trim government spending. Karamanlis had earlier ruled out the possibility of holding general elections at the same time as European Parliament elections in June, despite concern about the state of the economy.