Brussels, 11/10/2011 (Agence Europe) - Greece's international creditors (the European Commission, the IMF and the ECB) have finished their fifth fact-finding mission in the country, but the outcome of the vote in Slovakia on Tuesday 11 October on the second Greek bailout and increasing the powers of the EFSF bailout fund was difficult to predict as we went to press. Once the report on Greece has been approved by the ECOFIN Council, the next instalment of the first Greek bailout (€8 billion) will be handed over to Athens early in November, some €2.2 bn of which from the IMF.
In a joint press release, the fact-finders explain:
“Regarding the outlook, the recession will be deeper than was anticipated in June and a recovery is now expected only from 2013 onwards. In the fiscal area, the government has achieved a major reduction in the deficit since the start of the programme despite a deep recession. However, the achievement of the fiscal target for 2011 is no longer within reach, partly because of a further drop in GDP, but also because of slippages in the implementation of some of the agreed measures. As for 2012, the mission believes that the additional measures announced by the government should be sufficient to bring the fiscal programme back on track and ensure that the deficit target of €14.9 billion will be met. Looking to 2013-14, additional measures are likely to be needed to meet programme targets. It is essential that such measures focus on the expenditure side.
In the area of privatisation, delays in the preparation of the assets for privatisation, and to some extent worse market conditions, mean that revenues in 2011 will be significantly lower than expected. The government remains, however, committed to the revenue target of €35 billion by the end of 2014. the recent amendment of the banking law ensures that non-viable banks can be wound down while protecting depositors' interest and preserving the stability of the financial system. A reinvigoration of reforms remains the overarching challenge facing the authorities. the decision to suspend the mandatory extension of sector-level collective agreements to the firm level is a major step forward, as it will help ensure the flexibility in the labour market needed to boost growth”. (MB/transl.fl)