The International Monetary Fund said on Monday that Greece's economy would only grow by just under 1.0 percent in the long run given the constraints of its bailout program, but should meet the fiscal surplus target preferred by most IMF directors.
In its annual review of Greece's economic policies, the IMF said most of its board directors favor a Greek fiscal surplus target of 1.5 percent of gross domestic product by 2018, while some directors favor the higher 3.5 percent target sought by Greece's European lender group.
The Fund did not identify which directors favored the higher target or how many of its 24-member board shared that view.
The rare split among IMF's directors reveals some divisions in their views of Greece's fiscal performance and debt sustainability as the IMF considers whether to participate in a new bailout for Greece needed by mid-2018.
The IMF has abstained from financial involvement in Greece's third bailout from European lenders since 2010, but remains actively engaged in negotiations on a new deal to start in mid-2018.
IMF Managing Director Christine Lagarde and other senior officials have argued that a Greek fiscal surplus target of 3.5 percent of GDP is too ambitious and massive debt relief or further austerity measures, which would hurt growth.
Germany, which contributes the most to Greece's bailout, faces national elections in September, and is strongly against any discussion of debt relief before Greece reaches the bailout target.
The IMF review did not address whether the Fund would commit financial resources to Greece. The Fund said in a statement that the directors recognized that austerity measures and reforms have "taken a heavy toll on society that, together with high poverty and unemployment rates, has contributed to a slowdown in the reform implementation."
"Most directors agreed that Greece does not require further fiscal consolidation at this time, given the impressive adjustment to date."
Despite the divisions over the fiscal target, the IMF said the directors called for Greece to broaden its personal income tax base and rationalize pension spending to make room for lower tax rates and more aid to the poor.
Greece is expected to need a new tranche of aid under the current 86 billion euro ($92 billion) program by the third quarter of this year, and the head of Greece's bailout fund said last week that a further slice of aid could only be granted once the IMF decides to formally join the program.
Germany's Finance Minister Wolfgang Schaeuble believes that a decision by the IMF to pull out of the bailout would mean that the current program would end as well.
Reuters
Tue Feb 07 2017
LAGARDE: Most directors agreed that Greece does not require further fiscal consolidation at this time, given the impressive adjustment to date.
The battle to reduce road deaths
In Malaysia, over half a million road accidents have been recorded so far this year.
Pro-Palestinian NGOs seek court order to stop Dutch arms exports to Israel
The Dutch state, as a signatory to the 1948 Genocide Convention, has a duty to take all reasonable measures at its disposal to prevent genocide.
How quickly can Trump's Musk-led efficiency panel slash US regulations?
Moves by Trump and his appointees to eliminate existing rules will be met with legal challenges, as many progressive groups and Democratic officials have made clear.
2TM: Consultations on PTPTN loans, admission to IPTA at MOHE booth
Consultations on PTPTN loans and admission to IPTA are among services provided at the Higher Education Ministry booth.
Kampung Tanjung Kala residents affected by flooded bridge every time it rains heavily
Almost 200 residents from 60 homes in Kampung Tanjung Kala have ended up stuck when their 200-metre (m) long concrete bridge flooded.
COP29 climate summit draft proposes rich countries pay $250 billion per year
The draft finance deal criticised by both developed and developing nations.
Bomb squad sent to London's Gatwick Airport after terminal evacuation
This was following the discovery of a suspected prohibited item in luggage.
Kelantan urges caution amidst northeast monsoon rains
Kelantan has reminded the public in the state to refrain from outdoor activities with the arrival of the Northeast Monsoon season.
Former New Zealand PM Jacinda Ardern receives UN leadership award
Former New Zealand prime minister Jacinda Ardern was given a global leadership award by the United Nations Foundation.
ICC'S arrest warrants for Netanyahu, Gallant an apt decision - PM
The decision of the ICC to issue arrest warrants against Benjamin Netanyahu and Yoav Gallant is apt, said Datuk Seri Anwar Ibrahim.
KTMB provides two additional ETS trains for Christmas, school holidays
KTMB will provide two additional ETS trains for the KL Sentral-Padang Besar route and return trips in conjunction with the holidays.
BNM'S international reserves rise to USD118 bil as at Nov 15, 2024
Malaysia's international reserves rose to US$118.0 billion as at Nov 15, 2024, up from US$117.6 billion on Oct 30, 2024.
Findings by dark energy researchers back Einstein's conception of gravity
The findings announced are part of a years-long study of the history of the cosmos focusing upon dark energy.
NRES responds to Rimbawatch press release on COP29
The Ministry of Natural Resources and Environmental Sustainability (NRES) wishes to offer the following clarifications to the issues raised.
Online Safety Bill and Anti-Cyberbullying Laws must carefully balance rights and protections
The Online Safety Advocacy Group (OSAG) stands united with people in Malaysia in the fight against serious online harms.
Malaysia's inflation at 1.9 pct in Oct 2024 - DOSM
Malaysia's inflation rate for October 2024 has increased to 1.9 per cent, up from 1.8 per cent in September this year.
Saudi Arabia showcases Vision 2030 goals at Airshow China 2024
For the first time, Saudi Arabia is participating in the China International Aviation & Aerospace Exhibition held recently in Zhuhai.
King Charles' coronation cost GBP 71mil, govt accounts show
The coronation of Britain's King Charles cost taxpayers GBP72 million (US$90 million), official accounts have revealed.
Couple and associate charged with trafficking 51.9 kg of meth
A married couple and a man were charged in the Magistrate's Court here today with trafficking 51.974 kilogrammes of Methamphetamine.
PDRM to consult AGC in completing Teoh Beng Hock investigation
The police may seek new testimony from existing witnesses for additional insights into the investigation of Teoh Beng Hock's death.