IMF approves 3.2 billion euro loan tranche for Greece

WASHINGTON, Jul 09 (bdnews24.com/Reuters) - The International Monetary Fund's executive board on Friday approved a disbursement of about 3.2 billion euros to help Greece pay debts due this month and return to positive economic growth in 2012.

In announcing the payment, part of a 110 billion euro IMF-European Union bailout package crafted for Greece last year, IMF Managing Director Christine Lagarde said debt-laden Greece has made progress but has much more work to do.

"The program is delivering important results: the fiscal deficit is being reduced, the economy is rebalancing, and competitiveness is gradually improving," Lagarde said in a statement on her fourth day in her new role.

"However, with many important structural reforms still to be implemented, significant policy challenges remain. A durable fiscal adjustment is needed, lest the deficit get entrenched at an unsustainably high level, and productivity-enhancing reforms should be accelerated, lest growth fail to recover," she said.

The IMF has warned the crisis in Greece could reach countries like the United States through money market funds, especially if the contagion spreads to European banks heavily exposed to Greek debt.

The global lender scheduled its meeting to consider the fifth loan disbursement for Greece after euro zone leaders agreed on Saturday to release their portion of the 12 billion euros due to be paid to Athens from the initial bailout.

The tranche approved on Friday brings IMF disbursements so far to Greece totaling about 17.4 billion euros.

So far, the program has failed to restore confidence in Greece's finances and a new package is in the works to cover Athens' funding needs through 2014, with European officials now trying to involve private sector creditors.

However, euro zone diplomats said on Friday that effort had stalled and there was little chance of reaching the 30 billion euros target figure.

Germany, the Netherlands and other northern euro zone states demand the private sector must bear a portion of the cost of a second package so the burden does not fall solely on the public sector and taxpayers.

"Greece's debt sustainability hinges critically on timely and vigorous implementation of the adjustment program, with no margin for slippage, and continued support from European partners and private sector involvement," Lagarde said.

To secure the latest IMF disbursement, Greece's parliament had to approve deeply unpopular austerity measures to put the nation in a better position to carry its debts.

Lagarde said Greek authorities had made progress in the fiscal area by identifying measures required to reduce the general government deficit to less than 3 percent of gross domestic product by 2014.

She also lauded the government's privatization strategy and noted that while the plan to sell 50 billion euros of state assets by 2015 is "very ambitious, the establishment of an independent privatization agency should help realize transparent and timely implementation."

Still, even more effort is required, Lagarde said.

"To strengthen Greece's competitiveness, structural reform implementation needs to be accelerated. This will help achieve synergies, such as between privatization and reducing administrative barriers to investment. The reform agenda should be expanded to address Greece's high labor tax wedge and inefficient judicial system," Lagarde added.

She also called for steps to preserve stability in Greece's financial sector, including higher capital buffers for banks and an adequate support and resolution framework.

"Continued liquidity support from the ECB (European Central Bank) remains critical to manage liquidity needs," she said.

A IMF spokeswoman confirmed Lagarde, who took over as IMF chief earlier this week, chaired the executive board meeting.

Some had suggested that she recuse herself since one week ago she had been involved as France's finance minister in discussions on second bailout package for Greece.

"She is aware that she will be scrutinized, and rightly so, because of the obvious potential conflict of interest," said Jacob Kirkegaard, a research fellow at the Peterson Institute in Washington, said ahead of the IMF board meeting.

Lagarde told reporters on Wednesday that the euro zone debt crisis was her top priority, although she declined to prejudge the IMF board discussions and its outcome.

bdnews24.com/ah/1835 h.

View the original article here

Read more...

Ogier clinches victory in Greece

Athens, June 20 (bdnews24.com/Reuters) ? Frenchman Sebastien Ogier won the Acropolis Rally for the first time on Sunday following an thrilling duel with Citroen team mate and overall leader Sebastian Loeb on the race's final day.

Ogier began proceedings just 2.2 seconds behind his compatriot in the overall classification and the two Citroen DS3 drivers reached the mid-morning service in Loutraki east of the capital separated by a mere tenth of a second.

The 27-year-old then built up a 10.5-second advantage over Loeb heading into the event-closing Power Stage which he maintained after both drivers posted almost identical times in a dramatic finish. Title rival Mikko Hirvonen finished third in his Ford Fiesta.

"It was a very good rally for me," said Ogier, who bagged three bonus points for his Power Stage victory. "At the beginning it was difficult to find the rhythm but yesterday in the second loop we drove fast, we pushed hard and now we have a great result."

Ogier's victory ended Loeb's run of victories in this year's world championship, following the seven-time champion's triumphs in the previous two rounds in Argentina and Italy.

It is the third time that the 27-year-old, whose last win came in Jordan two months ago, and co-driver Julien Ingrassia have triumphed and as a result Citroen have now won the last six rounds of the series.

Loeb retains the overall leadership with 146 Points. Hirvonen lies second just 17 points behind while Ogier is third a further five points adrift.

"It's been a great battle," Loeb told reporters. "It was frustrating not to win because I think we were the fastest in the rally. We were first on the road for two days and second on one day so we had a disadvantage."

After securing the overnight lead, Loeb was favourite to win his third race in succession but had to settle for second after a tense battle with Ogier.

Ogier led going into the final power stage, a four kms test using the start of Saturday's Nea Politia night stage and sections of two stages already ran in the morning resulting in a tricky, rock-strewn surface.

The Power Stage is a new concept this season and awards bonus points to the fastest three drivers.

The rally, one of the most gruelling tests in the championship with cockpit temperatures usually well in excess of 30 degrees Celsius, is returning to the calendar after a year's absence.

The seventh round of the championship marking the halfway stage of the season is the Rally of Finland from July 28-31.

bdnews24.com/sd/1514h

View the original article here

Read more...