IMF: Greece Has Made "Significant Progress"

The managing board of the International Monetary Fund is expected to meet on Monday, 29 July and decide on the release of an 1.78 billion Euros instalment to Greece.

Speaking to reporters, William Murray, an IMF spokesman said that the IMF had accepted a cut in VAT on the restaurant sector in Greece because it was a "temporary measure which will not affect the program's targets, while revenues will be covered with equal measures". Murray said there was no any sign that the IMF was going to leave Greece any time soon and noted that the Fund was operating in "full cooperation" with its European partners.

Meanwhile a report from the IMF on the Eurozone noted that "significant progress" has been made in Greece lately, underlining particularly reforms made in the labor market, in cutting dismissal compensations and taxation along with adopting legislation to deregulate so-called closed professions and the transport and energy services markets.

The report notes that action was needed to improving competition in markets of services and products, improving business environment and conditions in labor markets. The IMF also repeated recommendations made to Greek authorities for measures to cut labor cost, facilitating investors, overcoming difficulties in product markets and amending existing legislation in export activity.

In other related news, a report by the Greek State Budget Office said:

      "There is no more room to cover a funding gap expected after 2014 with additional austerity measures. The solution is only reforms, a precondition for further funding assistance to Greece by its European partners. Therefore, the period until 2014 will be the country's last chance to avoid a worsening of the crisis."

The Office, in its quarterly report on the Greek economy, stressed that "a return to sustainable growth is going to prove to be an elusive dream if critical reforms are not implemented".

Commenting on delays in the program, the report reveals that the greatest drawback was in the area of reforms, such as in the public sector, privatizations, tax system, healthcare and education.

At the same time the report points out that the Greece's economic situation remained critical in the second quarter of 2013, although they stressed that progress has been made in the fiscal section of the adjustment program.

(Combined Reports)