After lengthy delays, the IMF unblocked part of its aid to Greece on Wednesday, offering a brief respite to the recession-mired country grappling with austerity measures.
The amount released — 3.2 billion euros (US$4.3 billion) — might seem a mere footnote to the 172 billion euros international bailout for Greece in March last year, the second rescue effort after a 2010 aid program foundered.
“Greece’s fiscal effort has been impressive by any measure,” IMF managing director Christine Lagarde said in a statement.
The deep deficit slashing the country has been forced to undertake from the beginning of the program will help get Athens back to the spending levels prior to the crisis, she said, “and has been designed to protect the most vulnerable.”
However, she warned: “Much more remains to be done to achieve the critical mass of reforms needed to boost productivity and lower prices.”
“Looking ahead, Greece needs to radically overhaul its tax administration to bolster tax collections, fight tax evasion and shrink the public sector, in particular through targeted redundancies,” she said.
The IMF executive board approved the release of the funds after completing the first and second reviews of Greece’s economic performance under the program, which saw the board waiving some performance criteria and modifying others.
The EU had acted more swiftly than the IMF, releasing 34.3 billion euros in the middle of last month that had been frozen. The eurozone is expected to approve a another 9.2 billion euros installment in the coming days.
The fresh IMF payment is part of a four-year, 28 billion euros Extended Fund Facility loan.
The IMF released an initial 1.6 billion euros, but froze subsequent payments in view of Athens’ failure to meet the loan program’s criteria and concerns that the debt burden was unsustainable.
In November, after intense negotiations with European authorities, the IMF abandoned its 2020 goal for reducing Greece’s debt burden to 120 percent of GDP and accepted a compromise of a 124 percent debt-to-GDP ratio.
Greece’s debt currently stands at about 170 percent of GDP.
Greece must continue to restructure and strengthen the banking system, Lagarde said, noting that additional financing from eurozone member states to allow Greece to redeem treasury bills from banks could support liquidity and credit creation.
Separately, the IMF also released a 838.8 million euros installment of its loan program to Portugal, while calling the country’s efforts to reform its economy impressive. The latest money released is part of a 78 billion euros bailout agreed in 2011.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his