MercoPress. South Atlantic News Agency

EU and IMF are demanding more austerity and reforms from Greece

IMF expert, Poul Thomsen: “program at a crossroad”

EU and IMF auditors cleared a new slice of rescue funding for Greece on Tuesday but demanded more austerity action while acknowledging that the country faced potential strains in repaying on time.

The EU-IMF mission demanded further action to broaden taxes, cut spending, particularly on health care, and to tighten up at state companies.

The expert from the IMF, Poul Thomsen, commenting on the outcome of the audit of radical reforms imposed under the rescue in May, said: “The programme is at a crossroad.”

The approval for the third tranche of funding had been delayed by a day because negotiations on further measures, described as “difficult” by the Greek side, were continuing, just as the European Union was putting in place a rescue for Ireland, the second Euro zone crisis in six months.

The auditors, saying that Greece was “largely on track” with reforms to correct its public finances, approved the release in December of a third instalment of rescue funds totalling 9 billion Euros.

The fourth slice of 15 billion Euros due by March would depend on progress made with the latest requested measures to tame the budget deficit and national debt.

The auditors, speaking after a review of Greek public finances following a 110 billion Euros May rescue, did not rule out extending the repayment timetable nor providing a further loan to Athens.

The Greek government was determined to move on structural reforms, Thomsen said. “We are largely on track, with small deviations, we are close to targets.” He said that “the main risks are linked with the possibility that reforms are delayed.”
He added: This is the key question”.