The International Monetary Fund (IMF) has told Greece it must undertake further strict austerity measures to win the next release of bailout funds and avoid bankruptcy.
“Additional measures will be needed in order to reduce the budget deficit,” the IMF representative to Greece, Bob Traa, told an economic conference in Athens.
In the first eight months of the year, Greece’s budget deficit has overshot its 2011 target of 7.5 percent of GDP and the European Union and the IMF have warned they may not disburse the latest 8-billion-euro slice of their 110 billion-euro loan unless Athens stabilized its budget.
The EU and IMF agreed the three-year bailout package for Greece in May last year.
The country’s government promised to increase property taxes to raise some 2 billion euros needed to meet the 2011 fiscal targets, but European finance ministers said this was not enough.
Greece’s Finance Minister, Evangelos Venizelos, said European and international institutions were using Greece as a “scapegoat” and “easy excuse” to “hide their own lack of competence to manage the crisis.”
"We are living though a recession that is unprecedented in recent decades. The recession ... will reach 5.5 percent in . It is the third straight year of recession and it will continue for a fourth, though significantly reduced," Venizelos said.
Prime Minister George Papandreou canceled a planned trip to the United States on Saturday and returned home to deal with the ongoing crisis.
New austerity measures are expected to be announced after Venizelos holds a teleconference later on Monday with EU and IMF officials.