Greece was notified on Friday that it would receive the first tranche of its new bailout on Monday, 5.9 billion euros, as its lenders began putting pressure on the government to ensure that the upcoming elections do not lead to the pace of reforms slowing or fiscal targets being missed. Matthias Mors, the European Commission’s representative on the troika, which also includes the European Central Bank and the International Monetary Fund, announced that following the IMF’s approval of its participation in the bailout, the first installment of the 172-billion-euro package would be paid on Monday.
Mors made the announcement as he presented a report by the troika, which stresses that the implementation of the program is by no means guaranteed and that its success “depends chiefly on Greece.”
“It crucially hinges on the full and timely implementation of fiscal consolidation and growth-enhancing structural reforms agreed under the program,” says the report.
Mors identified the general elections, which are likely to be held in early May, as one of the main factors that could result in the program being delayed or derailed.
“Of course there are significant implementation risks,” he said. “We still have a huge budget deficit, we still have a huge current account deficit.” The EC technocrat also suggested that Greece would have to take further steps to improve its competitiveness, including additional reductions to labor costs. Mors said that significant cuts had been made but “perhaps we are only at the halfway point.”
He said that it would be possible for the new government to make adjustments to the program. “Every quarter there has to be a set of adjustments to the program, each time there is a new memorandum,” he said. “It is possible that there will be modifications to the memorandum after the elections. What’s important is the basis, the objectives, the policies remain the same.”
Sources told Kathimerini that the IMF’s permanent representative in Athens, Bob Traa, spoke to Finance Ministry officials on Friday to stress the importance of Greece sticking to the program and preparing the ground for the next set of measures that will have to be agreed with the troika in June. At that point, Athens will have to finalize measures designed to save more than 11 billion euros during 2013 and 2014.