IMF frees USD 4.6 billion in aid for Greece

Washington: The International Monetary Fund released USD 4.6 billion in aid to Greece today, after a yearlong delay to ensure Athens was meeting targets set by bailout lenders.

The disbursement followed the release at the end of April by the Eurogroup of 6.3 billion euros (USD 8.6 billion) in rescue program support to Greece, in a firm nod to its progress in cleaning up its finances and narrowing its budget deficit. The IMF funds are part of a four-year joint package with the European Union set in March 2012 and worth a total of USD 235 billion (173 billion euros) to rescue the sinking Greek economy. The package has required extensive reforms and painful austerity budgeting by the government. Two IMF disbursements were delayed over the past year -- lumped into Friday`s single payout -- amid questions over whether Athens was sticking to its promises on structural and financial reforms. The Greek government though has fought to limit the austere demands of lenders, as it remained stuck in a grinding recession dating back to 2008. The economy remained in recession in the first quarter of 2014, contracting at a 1.1 per cent annual pace, but is expected to achieve overall growth of 0.6 per cent this year. In April, the European Commission confirmed that Greece achieved an underlying budget surplus of 1.5 billion euros last year, beating its bailout program target of just balancing its accounts. That achievement opened the door for the Eurogroup disbursement, as well as the government`s successful return to commercial debt markets that month, raising USD 4.2 billion. "The recent return of the Hellenic Republic and of Greek banks to the international capital markets is an encouraging sign of increasing market confidence and is an important first step towards regaining broader market access," the Eurogroup said in early May. However, it added, "fully implementing the reforms of the program will be crucial to that end."