IMF official: Greece must shift focus on reformFebruary 1, 2012 - 15:49 AMT PanARMENIAN.Net - Debt-laden Greece and its international lenders must focus less on deficit reduction and more on reform because there are limits to what society can tolerate, a senior IMF official said on Wednesday, February 1, Reuters reported. With a long-awaited debt swap deal with private sector creditors almost secured, Athens' focus is now squarely on its 130-billion euro bailout talks with the IMF, the European Union and the European Central Bank - its public-sector lenders collectively known as the troika. Structural reforms and spending cuts are the main sticking points in the negotiations, which the EU and Greece want to complete by the end of this week. If they fail, Greece will plunge into a chaotic default that may spill over to other debt-laden countries such as Italy and Portugal. "We will have to slow down a little as far as fiscal adjustment is concerned and move faster - much faster - with implementing reforms," Poul Thomsen, the head of the IMF's inspection team for Greece, said in an interview with newspaper Kathimerini. More reforms and slower deficit reduction would be a policy shift compared with the country's first 110-billion euro bailout, which relied heavily on tax increases and less on spending cuts and which some economists blame for social unrest and the country's worst post-war recession. Despite an unprecedented tax onslaught, Greece has been consistently missing its deficit targets. Its budget shortfall is expected to have narrowed slightly last year to 9.6 percent of GDP from 10.6 percent in 2010. However, some analysts said Thomsen's suggested policy switch would not work unless Greece's lenders, including the IMF, increase their aid for Greece above the 130 billion euro mark. Top stories Yerevan has dismissed Turkey’s demand to shut down the Armenian nuclear power plant as “inappropriate”. Armenia will loan 2.9 billion drams to Nagorno Karabakh (Artsakh), according to a draft government decision. The Ministry of Ecology and Natural Resources of Azerbaijan has “strongly condemned” Armenia’s decision. Kerobyan has said that for the first time in the history of Armenia, the volume of foreign direct investments amounted to about $1 billion. Partner news | Russia clarifying reports on Baku’s alleged arms supply to Ukraine Russia says is carefully working to verify reports about alleged arms supplies from Azerbaijan to Ukraine Russia warns Armenia against “falling into West’s trap” Zakharova maintained, however, that anything that will benefit the people of Armenia can only be welcomed. CSTO: Armenia has not participated in secretariat’s work recently Recently Armenia has not participated in the work of the secretariat of the CSTO, Imangali Tasmagambetov said. Meeting with U.S., EU not against third parties, says Armenia The meeting scheduled for April 5 is dedicated to strengthening of the Armenia-EU-US cooperation, Yerevan added. |