IMF Approves EUR2.2 Billion Loan Tranche For Greece

The International Monetary Fund Monday approved a $2.2 billion tranche of its emergency loan program for Greece, paving the way for the debt-ridden country to avoid default, Dow Jones reported. The IMF board approval of the program allows the fund to immediately disburse financing to Athens, buying time for Europe to prevent a wider spread of the debt crisis into the rest of the euro zone. "Greece has substantial achievements to its credit, including a large fiscal deficit reduction. However, the program is in a difficult phase, with structural reforms proceeding slowly, the economy weak, and the external environment deteriorating," IMF chief Christine Lagarde said later Monday in a statement. "This has warranted a substantial downward revision to the medium-term outlook." The tranche had been delayed as Greece had failed to meet many of its basic loan program conditions and as concerns increased about the ability of the Greek government to turn its economy around. The IMF and Europe last year agreed to a joint EUR110 billion, three-year loan program. Deteriorating economic conditions and the inability of Greece to move forward with key reforms forced new financing agreements that included private-sector writedowns on their Greek debt holdings. Political turmoil and opposition in Athens threatened the agreements and both Europe and the IMF withheld the latest loan tranches. Read more. (Subscription required.)