WASHINGTON: The International Monetary Fund has completed a technical mission to Greece and is helping officials develop ways to reduce the country’s huge budget deficit, a spokeswoman said Thursday.
The mission that began in Athens on Jan. 13 “has concluded,” IMF spokeswoman Caroline Atkinson said at a news briefing.
IMF technical experts “have talked to the Greek authorities really focusing on what are the technical measures, where we can advise about how the authorities can best implement the stabilization program that they have announced, which is of course between them and the EU (European Union),” she said.
Greece fought Thursday to regain its credibility on financial markets as Greek bonds and stocks fell amid the debt crisis.
Finance Minister George Papaconstantinou said the government’s priority was regaining confidence on the markets.
The Greek stability plan to cut the public deficit from 12.7 percent of output in 2009 to 2.8 percent in 2012 is to go before EU finance ministers for approval on Feb. 16.
The proposed reduction, covering central government, welfare and local authority budgets, is huge by any standards amid severely strained public finances.
Atkinson said she expected that technical discussions with Greek authorities would continue “over the coming period.” “We will certainly be helping them on a technical basis as part of our normal surveillance to carry that implementation.... We have a lot of expertise on these various matters,” she said.
The spokeswoman reconfirmed that financial aid was not contemplated. “We don’t expect a request for financial assistance from Greece,” she said. Greek Prime Minister George Papandreou said earlier this month there was “no way” his debt-stricken country would drop the euro or seek aid from the IMF.
Meanwhile, a climate of doubt against debt-hit Greece and its questionable statistics has started to lift among EU states after two days of talks in Brussels, Papaconstantinou said on Wednesday.
“I left the meeting with the feeling that the climate against Greece is starting to change, and that we are slowly starting to build confidence,” he said.
Papaconstantinou this week promised fellow EU finance ministers a shakeup of national statistics after the recently-elected Socialist government shocked Brussels in October by announcing that the country’s deficit had been under-reported by its Conservative predecessors.
On Wednesday, the minister said that a damning European Commission report on Greece’s statistics earlier this month had been a “slap in the face” and that the credibility shortfall had hurt the country on borrowing markets.
The three main credit rating agencies — Fitch, Standard and Poor’s and Moody’s — have successively downgraded the country’s sovereign debt standing.
Moody’s yesterday said it was maintaining a negative outlook on Greece amid doubts over its chances.
Athens needs affordable loans as it aims to borrow over 50 billion euros ($72 million) this year but the credit downgrades have raised the risk factor of Greek government bonds for potential investors.
Last week Greece sold 2.08 billion euros in six-month and one-year treasury bills. On Tuesday it raised another 1.56 billion euros in 13-week bills.
Greece has a public spending deficit that rose to 12.7 percent of output last year, far above the 3.0 percent ceiling for countries that use the euro.
It is also saddled with a debt constituting 113 percent of gross domestic product (GDP).
A number of Greece’s euro zone peers have criticized Athens as its financial woes have put strong strain on the euro in recent weeks.
The European Commission sought permission Tuesday to check data sent by EU governments concerning their deficits to avoid a repeat of cases like that of Greece, accused of playing down its debt.