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发帖数: 372 | 1 IMF Executive Board Approves 30 Billion Stand-By Arrangement
for Greece
Press Release No. 10/187
May 9, 2010
The Executive Board of the International Monetary Fund (IMF) today approved
a three-year SDR 26.4 billion (30 billion) Stand-By Arrangement for Greece
in support of the authorities’ economic adjustment and transformation prog
ram. This front-loaded program makes SDR 4.8 billion (about 5.5 billion) i
mmediately available to Greece from the IMF as part of joint financing with
the European Union, for a combined 20.0 billion in immediate financial sup
port. In 2010, total IMF financing will amount to about 10 billion and wil
l be partnered with about 30.0 billion committed by the EU.
The Stand-By Arrangement, which is part of a cooperative package of financin
g with the European Union amounting to 110 billion (about US$145 billion)
over three years, entails exceptional access to IMF resources, amounting to
more than 3,200 percent of Greece’s quota, and was approved under the Fund'
s fast-track Emergency Financing Mechanism procedures.
“The Greek government should be commended for committing to an historic cou
rse of action that will give this proud nation a chance of rising above its
current troubles and securing a better future for the Greek people,” IMF Ma
naging Director Dominique Strauss-Kahn stated. “Today, the IMF has demonstr
ated its commitment to doing what it can to help Greece and its people. The
road ahead will be difficult, but the government has designed a credible pro
gram that is economically well-balanced, socially well-balanced—with protec
tion for the most vulnerable groups—and achievable. Implementation is now t
he key. Together with our partners in the European Union, we are providing a
n unprecedented level of support to help Greece in this effort and—over tim
e--to help restore growth, jobs, and higher living standards.
"Today's strong action by the IMF to support Greece will contribute to the b
road international effort underway to help bring stability to the euro area
and secure recovery in the global economy,” the Managing Director stated.
The Greek government has designed an ambitious policy package to address the
economic crisis facing the nation. It is a multi-year program that rests on
the twin pillars of substantial up-front efforts to correct Greece’s grave
fiscal imbalances and to make the economy more competitive that in time wil
l restore growth and jobs. The authorities’ program is designed with fairne
ss in mind so that the burden will be shared across all levels of society an
d that the most vulnerable groups will be protected. Exceptional financial a
ssistance from the international community will support the authorities’ ef
forts by providing sufficient financial resources to allow time for building
a track record of policy implementation that will restore market confidence
, foster growth and reduce Greece’s fiscal imbalances.
Following the Executive Board’s action on Greece, Mr. John Lipsky, First De
puty Managing Director and Acting Chair, said:
“The Greek economy has been shaken by adverse market sentiment in the past
few months. These pressures reflect concerns about unsustainable public fina
nces and weak competitiveness. Initial attempts to address these problems fa
iled to restore market confidence, with adverse spillover to the banking sec
tor.
“The Greek authorities have now developed a bold program with strong upfron
t policies to re-establish credibility and regain market confidence. The pro
gram focuses on: (i) restoring fiscal sustainability, (ii) boosting external
competitiveness, and
(iii) safeguarding financial sector stability. To allow time for Greece to i
mplement these reforms and demonstrate a credible track record, as well as e
ase the burden of adjustments on the part of the Greek people, the internati
onal community has embarked on an unprecedented financial support package. T
he ambitious measures that the Greek authorities are strongly committed to u
ndertaking under the program, including against the backdrop of the signific
ant risk of spillover to other countries, merit an exceptional level of acce
ss to Fund resources.
“At the heart of the adjustment strategy is a fiscal consolidation to lower
the deficit to well below 3 percent of GDP by 2014 and restore debt sustain
ability. The authorities have designed a large package of fiscal measures of
11 percent of GDP to achieve this target. The measures have been heavily fr
ontloaded and fully identified. The package appropriately includes a fair di
stribution of the adjustment burden across society by protecting the most vu
lnerable and imposing a higher tax burden on the relatively affluent. It als
o includes measures to rationalize the public sector.
“While short-run output will necessarily contract as the economy adjusts, s
tructural reforms should help to restore external competitiveness and, toget
her with improved market confidence, set the economy on a recovery path. Str
ong implementation of reforms aimed at increasing the flexibility of the lab
or market, improving domestic competition, and streamlining public administr
ation will be key.
“The recent European Central Bank’s decision to extend Greek bond eligibil
ity for repurchase transactions of market debt instruments issued or guarant
eed by the Greek government should help improve bank liquidity. Also, the es
tablishment of a Financial Stability Fund will ensure that banks remain adeq
uately capitalized during the downturn, preserving financial stability. Bank
ing supervision and the legal frameworks will also be strengthened.
“The Greek authorities’ program is an appropriately ambitious response to
the current circumstances and constraints, but considerable downside risks r
emain. The challenge ahead will be to implement the program rigorously, whil
e securing the necessary public consensus for reforms.
“The misreporting of Greece’s 2008 fiscal and public debt data, which led
to a breach of obligations under Article VIII, Section 5 of the Fund’s Arti
cles of Agreement, is regrettable. The authorities have already taken remedi
al measures to address data deficiencies, and they are committed to taking a
dditional corrective actions in consultation with the Fund, EU partners, and
Eurostat. No further action is required by the Fund under its procedures fo
r the breach of obligations. Going forward, strict compliance with reporting
requirements to the Fund will be required.”
ANNEX
Recent Economic Developments
Greece entered the global recession with deep-rooted vulnerabilities. Amid s
lowing growth and reduced global risk appetite, the country’s heavy depende
nce on foreign borrowing heightened concerns over long-standing fiscal and e
xternal imbalances. A significant revision to the 2008 and 2009 fiscal defic
it data announced by a newly elected government shocked markets because they
were twice as large as projected and revealed misreporting of official stat
istics. Public debt was commensurately increased from below 100 percent of G
DP to 115 percent of GDP by end-2009. Further, despite the recession in 2009
, the current account deficit stood at 11 percent of GDP—evidence of signif
icant domestic demand inflation and external competitiveness problems.
Initial attempts by the new government to address these vulnerabilities in J
anuary 2010 were not convincing. Greece was already in the Excessive Deficit
Procedure of the European Union’s Stability and Growth Pact and the author
ities agreed to reduce the fiscal deficit to below 3 percent of GDP by 2012.
The 2010 budget targets, however, were not sufficiently underpinned by meas
ures, and the macroeconomic assumptions underlying the deficit correction pr
ogram appeared too optimistic, thus causing further market jitters.
After extensive consultations with the European Commission, additional fisca
l measures were announced by the Greek authorities in February and March 201
0, but these also failed fully to cement market confidence. Lastly, markets
were further unsettled by what was perceived to be insufficiently clear fina
ncing assurances from euro partner countries. As a result, market sentiment
turned down further, and concerns about fiscal sustainability deepened, ther
eby worsening the crisis of confidence. Access to foreign funding dried up a
nd spreads on government paper widened sharply, threatening the economy with
a downward spiral of unfolding risks.
Program Summary
The authorities’ program focuses on the three key challenges:
1) Restoring confidence and fiscal sustainability: The program envisages an
exceptionally strong frontloaded fiscal effort, with fully identified measur
es through 2013. This is to bolster confidence, regain market access, and pu
t the debt-to-GDP ratio on a firmly declining path from 2013. The measures a
re also designed to buffer Greece’s most vulnerable.
2) Restoring competitiveness: The program includes nominal wage and benefit
cuts and structural reforms to reduce costs and improve price competitivenes
s, which would help Greece transition to a more investment and export-led gr
owth model. It also envisages improved transparency and a reduced role of th
e state in the economy.
3) Safeguarding financial sector stability: As the banking system goes throu
gh a period of deflation, which is expected to impact profitability and bank
balance sheets, the safety net for dealing with solvency pressures will be
expanded by establishing a Financial Stability Fund (FSF). To mitigate liqui
dity pressures stemming from the downgrading of the sovereign, the already e
xisting government banking liquidity support facilities will be extended,
Growth and Inflation Expectations
Real GDP growth is expected to contract sharply in 2010–2011, and recover t
hereafter with unemployment peaking at nearly 15 percent of GDP by 2012. The
frontloaded fiscal adjustment in 2010-11 will suppress domestic demand in t
he short run; but from 2012 onward, improved market confidence, a return to
credit markets, and comprehensive structural reforms, are expected to lead t
o a rebound in growth.
Inflation is expected to remain below the euro average. The needed adjustmen
t in prices is expected to come from domestic demand tightening, both throug
h fiscal adjustment and efforts to moderate public wages and pensions, and o
ther costs in the economy. Due to their demonstration effects, private secto
r wages are also expected to moderate. This will help restore price competit
iveness.
Additional Background
Greece, which became of member of the IMF on December 27, 1945, has an IMF q
uota of SDR 823.0 million.
For additional background on the IMF and Greece, see: http://www.imf.org/ext
ernal/country/GRC/index.htm
Greece: Selected Economic Indicators
2009 2010 2011 2012 2013 2014 2015
Projections
(Percentage change, unless otherwise indicated)
Domestic economy
Real GDP
-2.0 -4.0 -2.6 1.1 2.1 2.1 2.7
Output gap (percent of pot. output)
4.0 -1.1 -4.6 -4.7 -4.0 -3.7 -3.1
Total domestic demand
-2.4 -7.1 -5.2 0.1 1.7 1.8 2.1
Private consumption
-1.8 -4.0 -3.7 0.8 2.8 2.5 2.5
Public consumption
9.6 -10.6 -5.1 -3.6 -6.6 -3.2 -0.1
Gross fixed capital formation
-13.9 -11.4 -11.8 0.8 4.8 3.5 2.3
Change in stocks (contribution)
0.0 -1.0 0.0 0.0 0.0 0.0 0.0
Foreign balance (contribution)
0.7 3.8 3.6 1.0 0.4 0.5 0.3
Exports of goods and services
-18.1 4.5 5.4 5.9 6.0 5.9 6.0
Imports of goods and services
-14.1 -9.7 -6.1 1.6 3.8 4.6 3.7
Unemployment rate (percent)
9.4 11.8 14.6 14.8 14.3 14.1 13.4
Consumer prices (HICP), period average
1.3 1.9 -0.4 1.2 0.7 0.9 1.0
GDP deflator
1.4 1.2 -0.5 1.0 0.7 1.0 1.1
(Percent of GDP)
Balance of payments
Current account
-11.2 -8.4 -7.1 -5.6 -4.0 -2.8 -1.9
Trade balance
-7.7 -3.5 -0.2 0.6 1.3 1.9 2.4
Total transfers
0.5 0.4 0.5 0.5 0.4 0.4 0.3
Net income receipts
-4.1 -5.2 -7.5 -6.7 -5.7 -5.1 -4.7
Net international investment position
-86 -95 -104 -106 -106 -105 -102
Public finances (general government)
Total revenues 1/
36.9 40.0 39.0 38.5 38.2 37.2 36.3
Total expenditures 1/
50.4 50.5 53.2 53.9 54.0 52.3 50.6
Measures (cum.) 2/
… 2.5 6.7 9.0 11.0 12.6 12.2
Overall balance
-13.6 -8.1 -7.6 -6.5 -4.8 -2.6 -2.0
Primary balance
-8.6 -2.4 -0.9 1.0 3.1 5.9 6.0
Gross debt
115 133 145 149 149 146 140
Interest rates and credit
Long-term lending interest rate 3/
5.7 5.6 ... ... ... ... ...
Private credit growth 4/
4.2 ... ... ... ... ... ...
Exchange rates
Nominal effective exchange rate 3/
0.7 0.6 ... ... ... ... ...
Real effective exchange rate (CPI-based) 3/
1.8 1.6 ... ... ... ... ...
Memorandum item:
Nominal GDP (billions of euro)
237 231 224 228 235 242 251
Nominal GDP (percentage change)
-0.7 -2.8 -3.1 2.1 2.8 3.1 3.8
SS Sources: National Statistical Service; Ministry of Economy and Finance; B
ank of Greece; and IMF staff estimates.
1/ Excluding unidentified measures.
2/ Measures fully identified up to 2013.
3/ As of January 2010.
4/Domestic credit growth of households and enterprises. |
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