The IMF is seing a funding gap in 2014
The taking of additional measures, possibly also for 2013, if there is a fiscal gap in the budget’s execution, is being foreshadowed in the Commission report draft, in which insecurities about finance are being noted, as well as dangers concerning the economy’s return to growth. The Minister of Finance Yiannis Stournaras excluded the possibility of taking additional measures for this year, but the International Monetary Fund representative, Gerry Rice, during the standard Press Conference, in the IMF office in Washington, underlined that: “There is no funding gap until July 2014. One is expected to exist after July 2014”.
Mr. Rice also mentioned that, at the end of the month, the Fund’s Board of Directors will meet about Greece, also to decide about the 1.8 billion euro dose. Although no specific date has been set yet, as he said, this will be announced seven days before the meeting and that the dose is expected to be given in mid-August.
The Fund representative also referred to last Monday’s joint announcement by the IMF, the European Central Bank and the European Union, repeating that, in general, the Greek programme is in the right direction and a gradual return to growth is expected in 2014, but noted that prospects for the Greek economy continue to “remain uncertain”, for internal and extraneous reasons.
Answering questions about Greece, Mr. Rice referred again to the European partners’ commitment to support the country, as long as the commitments it took on are kept, noting at the same time that the IMF expects that all parts will keep what has been agreed for “the necessary funding”.
The IMF representative was also asked whether the Fund approved the reduction of VAT in the food sector by 10 percentage units. Among others, he mentioned that the troika’s agreement with the Greek government does not include the temporary reduction of VAT in restaurants and catering. But this issue continues to emerge in the lenders’ discussions with Greek authorities, he underlined.
Following the question, why does the troika demand more measures, since Mrs. Lagarde stated that she is happy with Greece’s progress, the IMF representative claimed that there is no issue of additional measures within 2013, but what has been agreed on must be implemented.
Answering a question concerning criticism about the IMF’s role and mission in the lending programmes in European countries and in particular about Greece and Portugal that “the IMF is being accused of helping the European Union in hiding the problems under the carpet” and that solutions to serious issues have been postponed until after the German elections, Mr. Rice rebuffed the accusations, expressing the opinion that the IMF functions with transparency and in full cooperation with its partners.
Finally, concerning Cyprus, Mr. Rice mentioned that the IMF’s general director, Christine Lagarde, answered to President Anastassiades’ letter, noting that she herself welcomed the president’s “determination” to continue the route of sustainable growth and assured him of the IMF’s support to the government’s efforts to implement this ambitious programme.