## Press Release: Statement by the EC, ECB, and IMF on the Second Review Mission to Greece

_IMF News, November 23, 2010_

## Source details

**Canonical URL:** [Press Release: Statement by the EC, ECB, and IMF on the Second Review Mission to Greece](https://www.imf.org/en/news/articles/2015/09/14/01/49/pr10454)

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## Bibliographic details
- Published: November 23, 2010

---

### Overview
- Publication date: November 23, 2010.
- Staff teams from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) visited Athens during November 14-23 for the second review of the government’s economic program.
- The program is supported by a EUR 80 billion loan from Euro area countries and a EUR 30 billion Stand-By Arrangement with the Fund.
- Overall assessment: the program remains broadly on track; the end-September quantitative criteria have all been met.

### Program objectives and economic outlook
- Program objectives:
  - Restore fiscal sustainability.
  - Safeguard financial sector stability.
  - Boost competitiveness to create conditions for sustained growth and employment.
  - Maintain fairness in the program.
- Outlook:
  - The economy is expected to begin turning around in 2011.
  - Wage and price inflation is beginning to moderate, setting the stage for improvements in competitiveness.

### Fiscal area — progress and remaining requirements
- Achievements and challenges:
  - The deficit reduction by 6 percent of GDP in 2010 is larger than the initially targeted change.
  - Data revisions for 2009 and weaker-than-projected revenue collection mean an extra effort will be needed to meet the deficit target of 7.5 percent of GDP in 2011, which the government has reaffirmed.
- Agreed new measures to broaden tax bases and eliminate wasteful spending, particularly in:
  - Health spending—which is inefficient relative to other euro zone countries;
  - State enterprises—which are a heavy burden on the economy with perennial losses for Greek taxpayers; and
  - Tax administration—which has instruments now coming into place to strengthen compliance.
- Medium-term fiscal anchor:
  - The government’s fiscal policy remains anchored in reducing the deficit to below 3 percent of GDP by 2014.
  - The government’s medium-term budget strategy paper, to be discussed in the next review, will specify time-bound action plans for crucial structural reforms needed to achieve the remaining fiscal adjustment, and to do so in a socially balanced way.

### Financial sector — stability support and measures
- Program effectiveness:
  - The program has been effective in supporting stability.
  - Activation of the EUR 25 billion expansion of the government program to guarantee bank bonds, adopted in August, will contribute to support the liquidity position of Greek banks.
- Market developments and capacity:
  - Some private banks have had some success recently in raising funding as well as capital in the markets.
  - While the banking system remains under some pressure, capital is adequate.
  - As envisaged under the program, the Financial Stability Fund is now available to provide support, if needed.
- Government actions:
  - The government has analyzed options for banks under its control and devised a program to address their stability and efficiency.
  - Banking and insurance supervision are being strengthened.

### Structural reforms — priorities and implementation challenge
- Purpose: secure Greece’s competitiveness, reinvigorate output, and increase employment.
- Progress: significant progress has been made, with some landmark reforms—including pension reform.
- Critical juncture: many necessary reforms to transform Greece into a dynamic and export-driven economy require skillful design and political resolve to overcome entrenched interests.
- Next-stage reform agenda includes:
  - Aligning wages more closely with firm-level productivity, including through reform of arbitration and collective bargaining systems.
  - Opening up access to services, trades, and professions.
  - Unlocking the potential of Greek industries by cutting red tape and barriers to entry, and privatizing state assets.
- Summary judgment: the reforms needed to return Greece to robust economic growth are underway, but structural issues must be dealt with to make the adjustment sustainable.

### Next steps and financing disbursement
- Approval of the conclusion of the second review will allow the disbursement of EUR 9 billion (EUR 6.5 billion by the euro area Member States, and EUR 2.5 billion by the IMF).
- The mission for the next program review is scheduled for February, 2011.

*Statement by the EC, ECB, and IMF on the Second Review Mission to Greece, November 23, 2010.*

---


## References

- [Greece and the IMF](http://www.imf.org/external/country/GRC/index.htm)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [Greece Fast Facts](https://www.imf.org/external/np/exr/countryfacts/grc/index.htm)
- [Greek Program Broadly on Track But Structural Reforms Remain](https://www.imf.org/external/pubs/ft/survey/so/2010/CAR112310A.htm)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr10454_