Press Release: IMF Completes First Review Under Stand-By Arrangement with Greece and Approves €2.57 Billion Disbursement
IMF News, September 10, 2010
Source details
- Canonical URL
- Press Release: IMF Completes First Review Under Stand-By Arrangement with Greece and Approves €2.57 Billion Disbursement
Other formats
Bibliographic details
- Published: September 10, 2010
Overview
- Date: September 10, 2010
- The Executive Board of the International Monetary Fund (IMF) completed the first review of Greece’s performance under an economic program supported by a 3-year, SDR 26.4 billion (about €30 billion) Stand-By Arrangement (SBA).
- Completion of the review enables the immediate disbursement of an amount equivalent to SDR 2.16 billion (about €2.57 billion).
- Total disbursements under the SBA after this tranche: SDR 6.97 billion (about €8.28 billion).
- The SBA was approved on May 9, 2010 (see Press Release No. 10/187).
Financial package and access
- The SBA is part of a cooperative package of financing with Euro area member states amounting to €110 billion over three years.
- The arrangement entails exceptional access to IMF resources, amounting to more than 3,200 percent of Greece’s quota.
- The SBA was approved under the Fund's fast-track Emergency Financing Mechanism procedures.
Performance and program implementation
- All quantitative performance criteria for end-June were met.
- Major structural reforms are ahead of schedule.
- The fiscal strategy is described as on track.
- Continued tight expenditure control and monitoring emphasized, in particular at sub-national levels.
- Authorities are determined to strengthen tax administration and reduce tax evasion to secure revenues and promote fairness in adjustment.
Structural reforms and growth priorities
- Restoring competitiveness and boosting potential growth identified as critical.
- Impressive progress has been made in structural reforms.
- Specific reforms and priorities cited:
- A far-reaching pension reform has been approved by parliament.
- Substantive labor market reform is underway.
- Priority actions needed: opening closed professions; moving forward with deregulation; implementing the services directive; eliminating barriers to tourism and retail trade.
Financial sector status and measures
- Liquidity in banks described as tight but manageable, supported by the ECB and the government’s guarantee program.
- The new Financial Stability Fund provides an important back-stop for capital adequacy.
- Greek authorities have commissioned:
- a strategic review for the banking sector, and
- a due diligence for state banks.
- Continued close monitoring of the financial sector recommended.
Executive Board remarks (Mr. Murilo Portugal, Deputy Managing Director and Acting Chair)
- “The Greek authorities have made a strong start with their economic program, and their determined implementation has started to deliver results. All quantitative performance criteria for end-June were met, and major structural reforms are ahead of schedule. It is essential to continue implementing the program rigorously, supported by the large-scale financial support of the international community, while securing public consensus for reforms.
- “The fiscal strategy is on track. Continued tight expenditure control and monitoring will be key, in particular at sub-national levels. The authorities are determined to strengthen tax administration and reduce tax evasion to secure revenues and promote fairness in adjustment.
- “Restoring competitiveness and boosting potential growth is critical. Impressive progress has been made in structural reforms. A far-reaching pension reform has been approved by parliament, and substantive labor market reform is underway. Priority now needs to be given to opening closed professions, moving forward with deregulation, implementing the services directive, and eliminating barriers to tourism and retail trade, where potential for growth remains high.
- “Liquidity in banks remains tight but manageable, supported by the ECB and the government’s guarantee program. The new Financial Stability Fund provides an important back-stop for capital adequacy. Moreover, the Greek authorities have commissioned a strategic review for the banking sector and a due diligence for state banks. Continued close monitoring of the financial sector will be important,” Mr. Portugal said.
Press Release No. 10/335, September 10, 2010.