IMF Says Greek Fiscal Targets Are Too Ambitious

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(Greece) – The International Monetary Fund, or IMF, has said recently that Greece’s current fiscal targets are too ambitious. Delia Velculescu, the IMF Greece mission chief, said early on Wednesday at an economic conference in Athens that the country needs considerable relief from their debt. She said that the new ESM program for Greece is definitely an important move that will help keep Greece in the Eurozone. She also said that Greece’s current government needs to remain vigilant and implement all the measures and reforms agreed on that will bring in new bailout funds, crack down on corruption, and also reform the tax system.

International creditors have said that Greece needs to decrease government spending while also increasing revenue. The tax hikes, civil salary cuts, pension reforms, and privatization deals have all been designed to achieve those goals. However, Velculescu has also said that Greece needs greater debt relief in order to make sure that the company is actually able to grow economically. Greece has recently received the first wave of bailout funds from its third bailout since 2010. Greece needs these funds to pay off loans to the IMF and also to the European Central Bank.

However, Velculescu has also said that Greece’s current debt load is unsustainable. The IMF has agreed to help fund Greece’s bailouts only if they meet the IMF’s requirements that they believe will help encourage sustainability. She said that the primary surplus targets that are currently required of Greece are particularly high and that the reforms, such as tax increases and pension cuts, may not actually be enough. She believes that Greece needs massive structural reforms in order to stabilize the economy. She said that, “We have proven that measures don’t need to be front-loaded prior to 2018, but it is necessary to assess whether the measures being proposed are according to our analysis for the viability of Greek debt.”

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