Greece secured a much-needed 6.8 billion euros (US$8.7 billion) in rescue loans on Monday after squeaking by an inspection from its international creditors, who are demanding it slash thousands of civil servant jobs and government spending.
Experts from the European Central Bank, the EU and the IMF said Greece’s finances are improving, although they warned that it is making reforms too slowly and that the outlook for its economy, which has been in recession since 2007, remains uncertain.
However, the so-called “troika of creditors still recommended that the next loan payments be made, and the finance ministers from the 17 countries that use the euro agreed.
Belgian Finance Minister Koen Geens said the loans would be divided into three groups and disbursed this month, next month and in October.
“Greece is getting on track,” German Finance Minister Wolfgang Schaeuble said as he left the meeting in Brussels. “It is not easy for them.”
Greece’s creditors said the country’s reform program remained “broadly in line” with projections. It also laid out the hope of a gradual return to growth next year.
However, it added that “the outlook remains uncertain.” Greece has been hammered by a financial crisis since 2009 and is in the sixth year of a deep recession.
The troika said “policy implementation is behind in some areas” and that the Greek authorities have said they will do more to ensure delivery of the fiscal targets for 2013 to 2014, noting in particular efforts to restrict overspending in the health sector.
“In short, it is time to step up the momentum of reform in Greece, support the return of confidence for the sake of sustainable growth and job creation,” European Commissioner for Economic and Monetary Affairs Olli Rehn said.
Greece is stuck in a years-long recession and unemployment has spiraled to above 27 percent, in part because of the reforms and austerity measures it is implementing.
The troika said that the government has also “committed to take steps to bring public administration reforms back on track,” including reducing the number of civil servants, one of the measures that has been among the most contentious in Greece’s reform program.
“Firing civil servants is always difficult, that is difficult in every country, certainly in such economic circumstances,” said Jeroen Dijsselbloem, who is head of the eurogroup meeting and Dutch finance minister.
Municipal workers went on strike for a second day yesterday to protest their inclusion in a government plan to reduce the number of civil servants and meet criteria for the country to continue receiving vital funds from its international bailout.