IMF in Athens Monitoring the Greek Economy - The Best from Greece

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Posted on: 07/Apr/2010

Two large teams of International Monetary Fund (IMF) experts will be in Athens in April to provide knowhow on taxation matters and on budget drafting and execution to the Finance Ministry.

The IMF experts, who are slated to have meetings with finance minister George Papaconstantinou and General State Accounts officials, will further examine the changes contained in the new taxation bill that is currently being debated in parliament, as well as the course of execution of the current state budget.

The Finance Ministry will seek IMF knowhow on ways of curbing tax evasion and on transition from annual to three-year budgets.

In early May, a team of the three-way committee (European Commission, European Central Bank and IMF) monitoring the Greek economy is due in Athens ahead of the drafting of its progress report on the Greek economy due to be submitted to the Commission on May 16. In addition to a review of fiscal developments and growth, the report is also expected to devote a large section to what Greece has done or intends to do with respect to structural changes, which include the social security system, the deregulation of the so-called "closed" professions, and acceleration of the denationalisations program.

According to ministry sources, the government intends to move ahead in the immediate future, by June at the latest, with specific moves aimed at creating a positive climate for the Greek economy in the international money and capital markets.

Regarding fiscal developments, the Commission, according to sources, plans to announce in May predictions of a 2.5 percent recession in 2010, a much more adverse forecast than the Finance Ministry's and Bank of Greece's revised prediction of a negative growth rate of 1.5-2.0 percentage points of GDP. In the event that the anticipated Commission forecast proves true, this development would further hinder budget revenues and possibly require additional measures for curtailing public expenditures, in order to attain the target of reducing the fiscal deficit by 4 percentage points of GDP by the end of the current year.



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