Tags: EU | Greek | Austerity

EU Applauds Greek Austerity, Approves $11.6 Billion in New Loans

Thursday, 19 Aug 2010 02:46 PM

The European Union on Thursday recommended approval of 9 billion euros ($11.6 billion) in new loans for Greece, calling the government’s efforts to cut spending "impressive."

Of that, 6.5 billion euros come from the EU's 16 eurozone countries, the rest from the International Monetary Fund. Payout of the funds needs approval from eurozone governments.

In a report on Greece's commitment to economic reforms and austerity, the European Commission gave a thumbs-up to Greece's efforts to cut spending and raise new tax revenue, saying it merited the release of the loans.

"Greece has managed impressive budgetary consolidation during the first half of 2010 and has achieved swift progress with major structural reforms," said Monetary Affairs Commissioner Olli Rehn.

He said the country's deficit has fallen by 46 percent over the first half of 2010, reduction that is "faster than planned." Public spending has dropped 17 percent compared with the first half of 2009.

Rehn cautioned that "despite significant progress ... challenges and risks remain. The main immediate challenge is to safeguard adequate liquidity and financial stability of the banking sector.

At the same time, he said, the structural reforms need "to be pressed ahead to unleash the huge potential for raising growth."

Rehn said he expects the finance ministers of the 16-nation euro-zone to approve new lending at a meeting on Sept. 7.

The EU and the IMF agreed last spring to a three-year rescue deal worth 110 billion euros ($141.6 billion). Greece has already received 20 billion euros ($25.75 billion), of which 15.5 billion euros ($20 billion) came from its EU partners and the remainder from the IMF.

On Aug. 5, a joint EU-IMF mission to Athens said Greece had made good progress in cleaning up its finances. Greece's excessive debt triggered a financial crisis this year eroding confidence in the euro.

The European Commission in the first half of 2010, the Greek deficit declined by some 46 percent, faster than planned. Also cash spending fell by 16.9 percent, compared to the first half of 2009, reflecting cuts in public sector wages and capital expenditure.

It added "progress with pension and public administration reform has been made ahead of schedule."

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The European Union on Thursday recommended approval of 9 billion euros ($11.6 billion) in new loans for Greece, calling the government s efforts to cut spending impressive. Of that, 6.5 billion euros come from the EU's 16 eurozone countries, the rest from the...
EU,Greek,Austerity,
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2010-46-19
Thursday, 19 Aug 2010 02:46 PM
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