A team of European and IMF experts will Monday (today) begin a second visit to Greece to assess the impact of government austerity measures aimed at taming the country's debt crisis, the finance ministry said. The visit follows an earlier trip in June when the group declared Greece's recovery programme to be on track.
Greece's Socialist government adopted the draconian spending cuts in May, in exchange for the release of a first instalment of loans from a three-year 110-billion-euro (136-billion-dollar) EU-IMF bailout package.
Leading International Monetary Fund representative Poul Thomsen and his European Union counterpart Servaas Deroose, are to meet Greek Finance Minister Georges Papaconstantinou during the two-week visit, said the ministry.
They are also set to have several meetings with officials charged with the execution of the budget. "Our main objective is to solve the short and long term problems of the deficit and public debt, and to ensure the viability of public finances," Deroose said in an interview with the Kathimerini newspaper published Sunday.
Deroose predicted that the Greek economy would contract by four percent in coming months but that the situation would begin to improve in the second quarter of 2011.
The austerity program is aimed at helping Greece reduce a huge public debt and deficit that eroded its credibility on financial markets and raised fears that other eurozone states could also be vulnerable. On Friday five out of six Greek banks passed EU-wide crash tests despite fears that the country's lenders were too heavily dependent on central bank funding. Papaconstantinou said the results were "positive and show that the Greek banking system can cope even in the extreme conditions of a stress test."
The Bank of Greece and some lenders noted that the simulation was even worse the real situation in the country, which remains mired in recession and was only just saved from debt default by the EU-IMF bailout.
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