Deal on second bailout to Greece close

A final agreement on the terms of the release of a second aid package to Greece is close, but the debt-laden country needs to step up structural reforms to overcome the crisis, International Monetary Fund (IMF) official, Poul Thomsen, said on Wednesday.

“The dialogue for the programme is to be concluded very soon,” he noted in an interview with Greek daily Kathimerini on Wednesday.

Greek government officials are negotiating with European Union and IMF inspectors in Athens over the conditions to unlock a second 130 billion euro (171.37 billion U.S. dollars) rescue loans package for Greece to be able to repay a 14.5 billion (19.11 billion U.S. dollars) bond next month.

Thomsen, who heads the group of international auditors currently in Athens, said the way forward for Greece is to strike a balance between harsh fiscal consolidation and structural reforms to boost competitiveness and growth.

“What the IMF has been saying is that after a very impressive start, the reform and modernisation effort needed for the economy to become competitive and restore growth have lost momentum. We need to restore this momentum,” he said.

According to local media reports, the Greek interim government is pondering spending cuts of a further 4 billion euros (5.27 billion U.S. dollars) this year. Greece’s creditors are pressing for a reduction in labour costs in the private sector to boost competitiveness.

Greek officials, labour unions and employer associations argue that a lower minimum wage that currently stands at about 750 euros (988.65 U.S. dollars) per month and reductions in Christmas, Easter and summer holiday bonuses will further deepen the recession.

They suggest focusing on raising revenues through combating tax evasion and the waste of public funds. – BuaNews-Xinhua