This Article is From Jan 09, 2014

International Monetary Fund still sees 'large uncertainy' over Greek comeback

International Monetary Fund still sees 'large uncertainy' over Greek comeback

European Commission President Jose Manuel Barroso (L) addresses reporters during a joint press conference with Greek Prime minister Antonis Samaras during the handover ceremony for the six-month rotation of Greece's EU Presidency at Zappeion Hall in Athen

Washington: The International Monetary Fund said on Thursday that considerable uncertainly still hangs over the Greek economy, despite the country announcing it will exit an International Monetary Fund-European Union bailout this year as scheduled.

IMF spokesman William Murray told reporters there has been renewed investor interest in some parts of the Greek economy, locked in a sharp contraction since 2008.

But he added: "There are a lot of challenges ahead."

"The uncertainty is still large. But our experience suggests that once a virtuous circle is under way, confidence can return quite fast," he said, declining to speculate just when such a turnaround will happen.

On December 30, Prime Minister Antonis Samaras said Greece was on track to exit the IMF and European Union rescue plan this year and to fund its needs from the commercial market.

"In the new year, Greek debt will be officially declared viable, meaning there will be no need for new loans and new bailout agreements," he said.

But as Greece assumed the rotating EU presidency for a six-month stint, European Commission President Jose Manuel Barroso urged Athens to stay the course of painful economic reforms.

"This is not the time to slow down the pace of reforms," Barroso said, adding: "My point is very clear: (adjustment) programs work, so we should not waste the efforts so far."

Greece was first bailed out by the EU, the IMF and the European Central Bank for 110 billion euros ($151 billion) in 2010.

When that effort failed to stabilize the country's finances, veering Greece dangerously close to exiting the eurozone, the country got a second rescue in 2012 worth 130 billion euros, plus a private sector debt write-off totalling more than 100 billion euros.

According to the 2012 plan, the IMF's funding for the Greek government should continue through 2016, while the EU-ECB support should end this year.
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