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 The chief EU inspector for Greece said that more austerity can be expected, including more wage cuts, despite the government's slashing of the minimum wage last month. "Basically I would say that if we look at what has happened in the last two years since the programme started, and what will happen until the end of the second programme, I think terms of reduction in unit labour costs, roughly speaking I would say maybe we are half way," Matthias Mors the told a briefing in Brussels. A report issued by the EU after the previous inspection by the troika - The EU, European Central Bank and IMF warned that, while Greece has complied with tough demands required for the second bailout, "very high" risks remain over implementation of austerity measures and long-term reforms. "Implementation risks will remain very high. The success of the second programme depends chiefly on Greece. It crucially hinges on the full and timely implementation of fiscal consolidation and growth-enhancing structural reforms agreed under the programme," a summary of the report said. Troika approval was required before Greece secured massive twin deals for a debt restructuring with banks and continued funds from eurozone-IMF rescue lenders. (Athens News/gw) and more euros for the debt slaves , of course chains come with the euros........ IMF: Greece may need more help
The loan package is based “on ambitious fiscal and privatization targets and above all on a reinvigoration of structural reforms,” IMF staff wrote in a report. “In the event of slower progress in policy implementation, or failure of the economy to respond rapidly enough to reforms, completion of reviews may require additional support from Greece’s European partners on yet more concessional terms than currently envisaged, and-or another restructuring of bonded debt,” according to the report. The Washington-based IMF, which is already lending to Portugal and Ireland, has reduced its share in the second Greek bailout as it sees its exposure to the euro region posing what the staff called “unprecedented financial risks” to its finances. It has also pushed European governments to boost their own bailout fund in an effort to protect Spain and Italy from contagion. The IMF board this week approved a 28-billion-euro loan for Greece. About 18.3 billion euros is fresh money, as the four- year arrangement follows a 2010 program that was canceled and left 9.7 billion euros undisbursed. The IMF calculates that the euro region will account for 80 percent of its credits in 2014. Greece is expected to start repaying its first loan to the fund next year. “If the program goes off track, Greece’s capacity to meet its obligations to the fund would hinge critically on the willingness of European partners to continue to backstop Greece’s payments capacity and the Eurosystem’s capacity to backstop bank liquidity while further efforts are put in place to stabilize the Greek economy,” IMF staff warned. The IMF estimates Greece’s financing needs to reach 164.5 billion euros through 2014 and to range from 8 billion euros to 21 billion euros for 2015 and the first quarter of 2016, depending on progress in restoring the country’s market access. Greece completed the world’s largest sovereign-debt restructuring and had to agree to deeper spending cuts to obtain the new funds as it faces a fifth year of recession. The new program also seeks to overhaul the country’s economy from public enterprises to the labor market to make it more competitive. The Greek government must continue to meet the conditions set by its international creditors to receive aid payments at three-monthly intervals. The IMF report said the new program was “subject to exceptional risks,” including upcoming elections that create uncertainty over whether the measures will implemented. “The materialization of these risks would most likely require additional debt relief by the official sector and, short of that, lead to a sovereign default,” it wrote. “In the absence of continued official support and access to” refinancing by the European Central Bank, “a disorderly euro exit would be unavoidable.” and in exchange for more help , comes more pressure from the Troika ... Troika steps up pressure on Greece over elections
Matthias Mors, the European Commission’s representative on the troika, which also includes the European Central Bank and the International Monetary Fund, announced that following the IMF’s approval of its participation in the bailout, the first installment of the 172-billion-euro package would be paid on Monday. Mors made the announcement as he presented a report by the troika, which stresses that the implementation of the program is by no means guaranteed and that its success “depends chiefly on Greece.” “It crucially hinges on the full and timely implementation of fiscal consolidation and growth-enhancing structural reforms agreed under the program,” says the report. Mors identified the general elections, which are likely to be held in early May, as one of the main factors that could result in the program being delayed or derailed. “Of course there are significant implementation risks,” he said. “We still have a huge budget deficit, we still have a huge current account deficit.” The EC technocrat also suggested that Greece would have to take further steps to improve its competitiveness, including additional reductions to labor costs. Mors said that significant cuts had been made but “perhaps we are only at the halfway point.” He said that it would be possible for the new government to make adjustments to the program. “Every quarter there has to be a set of adjustments to the program, each time there is a new memorandum,” he said. “It is possible that there will be modifications to the memorandum after the elections. What’s important is the basis, the objectives, the policies remain the same.”
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Saturday, March 17, 2012
The beat goes on in Greece....
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