Brussels, 11/06/2014 (Agence Europe) - In a monitoring report on Greece published on Thursday 10 June, the International Monetary Fund (IMF) was relatively optimistic and issued a raft of recommendations. Noting unprecedented budgetary measures, the IMF forecast a 1% of GDP shortfall next year from the target of a primary budget surplus of 3% of GDP, which has been laid down as a condition for cutting the debt. The IMF says more budgetary adjustment is needed to make the debt sustainable, and notes that people are suffering from adjustment fatigue at a time when the coalition government has a two-seat majority in parliament. The IMF says: “The adjustment fatigue now evident and the 'social dividends' and 'no new measures' promised by political leaders suggest that the political commitment to the debt strategy will be severely tested going forward” ahead of the general elections in Greece in 2016. The debt reduction strategy foresees a primary surplus of 4.5% of GDP in 2016. IMF head of mission for Greece Poul Thomsen says in comments on a survey on the IMF website that relying simply on the projected economic recovery will not be enough to meet the targets. The IMF says that the recession is not as bad as had been predicted in 2013, but says that the high level of non-performing loans are seriously jeopardising banks' ability to finance recovery. The IMF says banks must take a strong hand when dealing with toxic loans and will probably need extra capital. It predicts a financing shortfall of €12.6 billion after May 2015. (EL)