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Eurogroup: IMF Says Greece Must Do More Before Loan Disbursement

Greece’s official creditors failed to make any visible headway Monday in averting the country’s looming debt crunch, drawing a diplomatic veil over suggestions of “heated” exchanges at their latest meeting.
International Monetary Fund Managing Director Christine Lagarde and EU officials praised the government of Prime Minister Antonis Samaras for taking politically courageous decisions to bring the country’s debt under control, but Ms. Lagarde said Greece must do more “on all fronts” before they could consider paying out the next vital tranche of 31 billion euros ($40.4 billion) in aid under Greece’s bailout program.
Jean-Claude Juncker, who leads the regular meetings of euro-zone finance ministers, told a joint press conference that the creditors want the Greek government to complete a “substantial” list of budget measures and reforms by Oct. 18, when EU heads of governments will next meet.
The continuing impasse on the Greek issue overshadowed an otherwise optimistic meeting of the euro zone’s 17 finance ministers, which saw the approval of more aid to Portugal and a broad endorsement of the tough budget announced last week by Spain’s government.
Some observers saw that budget as the prelude to a request for a full-blown aid package, but Spanish Finance Minister Luis de Guindos again gave no hint of any such action being imminent.
“Greece is doing a lot,” said Ms. Lagarde. “There is no question about it. But action is action…The list of prior actions has to be completed.”
“Prior actions” is the creditors’ phrase for the spending cuts, tax increases and other reforms that the previous Greek government had promised to do before two elections in quick succession paralyzed the political process for much of the year. Those actions are likely to exacerbate in the short run a recession that is already much worse than the creditors expected earlier in the year.
“Before we agree to the next steps, we must await the Troika report and we need to be sure that Greece is implementing the measures,” Dutch Finance Minister Jan Kees de Jager said after the meeting. He noted that Greece still has room to cut civil servants’ pay, and still spent more on defense than other euro-zone members.
(source: dow jones)

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