The International Monetary Fund agreed to disburse 1.7 billion euros ($2.3 billion) to Greece under its second bailout to the country after the government took measures including a bill to dismiss public-sector employees.
Greece now needs to focus on improving tax collection, the Washington-based IMF said in an e-mailed statement after meeting yesterday.
“Greece is well underway to complete its ambitious fiscal adjustment plan, and is on track to meet its 2013 fiscal targets,” IMF Managing Director Christine Lagarde said in the statement. “A critical priority is to tackle tax evasion by pressing forward rapidly with reform of the revenue administration to improve operational independence and make the burden of adjustment more equitable.”
More than three years after Greece revealed it had misled its euro partners on the state of its finances, the economy of the Mediterranean nation continues to shrink while relying on loans from the euro area and the IMF to pay pensions and wages.
Greek lawmakers in April passed a bill including plans to fire 15,000 workers by the end of next year as the government of Prime Minister Antonis Samaras cleared the latest hurdle to receiving international aid payments.
Yesterday’s approval follows the green light given by European finance chiefs last month under the joint 130 billion-euro rescue.
Lagarde in the statement reminded euro nations that they gave assurances “that they will consider further measures and assistance, if necessary, to reduce debt to substantially below 110 percent” of gross domestic product by 2022.
“Their continued commitment to provide adequate financial support to Greece during the life of the program and beyond until it has regained market assess, provided that Greece complies fully with the program, is also essential.”
The rescue package for Greece was approved in early 2012 after an initial 110 billion-euro bailout of the nation in 2010. The second rescue also included the largest sovereign debt restructuring in history.