IMF Approves New Loan for Greece

Posted March 15th, 2012 at 4:40 pm (UTC-5)
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The International Monetary Fund has approved a new $36-billion loan for debt-ridden Greece, despite misgivings about the country's economic performance with a previous loan.

The board of the Washington-based institution on Thursday adopted a proposal by IMF Managing Director Christine Lagarde for the new funding. The loan will be disbursed in installments over a four-year period.

Lagarde said that Greece has made tremendous efforts over the past two years to implement austerity measures, but warned that the challenges confronting the country remain significant. In a written statement, she said that risks to Greece's reform program “remain exceptionally high, and there is no room for slippages.''

She also said significant further measures are necessary to put the Greek debt on a “sustainable downward trajectory.”

The IMF loan comes on top of the recent agreement by Greece's European neighbors to hand it a new $170-billion bailout, the country's second rescue package in two years, and private creditors' elimination of $142 billion in debt Greece owes them.

The international funding organization has said it was disappointed in Greece's economic progress after securing a previous $39-billion IMF loan. The agency sent Greece $26 billion of that loan, but canceled the remainder to make way for the new funding.