Greece says talks with EU-IMF auditors end positively

12:17, June 04, 2011      

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Greece's talks with auditors of the European Union and the International Monetary Fund (IMF) on the release of the fifth tranche of bailout fund has ended positively, the Greek Finance Ministry said Friday. The EU-IMF officials are due to issue their own announcement later on Friday.

The outcome of the latest inspection of Greek finances by EU- IMF representatives will determine the release of the fifth 12 billion euro (17.38 billion U.S. dollars) tranche of aid to Athens from the 110-billion euro three-year support package agreed last year, amidst ongoing talks for a second aid pact to the debt- ridden country.

According to the Greek Finance Ministry statement talks included progress made so far in the Economic Policy Program launched last year to tackle the crisis, the Medium Term Fiscal Strategy for 2012-2015, measures to achieve the 2011 deficit target, the privatization and asset management program and structural reforms to restore growth.

"The Greek government has already made in the past few weeks public announcements on these issues reaffirming its commitment with specific decisions. Relevant texts will be finalized in the coming days and will be submitted to Parliament following discussion and approval by the Council of Ministers," said the statement.

According to Greek media reports, the texts will be discussed by the Greek cabinet next week and are expected to be ratified by the parliament by June 22.

Amidst strong reactions by labor unions, ordinary citizens who protest on a daily basis and reservations by some deputies of the ruling socialist party which holds a 156 majority in the 300- member strong parliament, local analysts note that in case of a failure in parliament, Greece could hold snap general elections in July.

Excluded from international debt markets due to extremely high interest rates since early 2010, Greece was narrowly saved from default in May 2010 after securing the EU-IMF aid and pledging harsh austerity and reform measures to put its finances in order by 2014.

As a year on from the first agreement the euro zone member country lags on key targets of fiscal consolidation and structural reforms and its full return to markets will not be made in 2012, as initially scheduled, European partners and IMF increase pressure for prompt results to continue vital funding.

Greek Finance Minister George Papaconstantinou said recently that without the foreign aid Greece would not manage to cover its immediate financing needs as early as mid-July this year and would default on payments of civil servants'salaries and pensions.

Amidst fueled scenarios of default, Moody's further downgraded the credit rating of the country's sovereign debt by three notches this week and the ratings of eight Greek banks on Friday, with a negative outlook.

While crucial talks in Athens winded up, Greek Prime Minister George Papandreou was in Luxembourg for a meeting with Eurogroup President Jean-Claude Juncker on Friday to brief him on his government' s plans for a new round of austerity measures, such as spending cuts and tax hikes, as well as a 50 billion euro five- year privatization program to be launched this summer.

Source: Xinhua

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