Greece Approved for 30 Bln IMF Loan

May 10, 2010 Taxation in EUTaxation in Greece

CSO_004The financially struggling nation of Greece has been approved for a EUR 30 billion fast track loan by the International Monetary Fund (IMF), to stabilize the country’s economy and provide a needed sense of financial security. The new loan is intended to save Greece from being forced to seek funding from international markets within the next three years.

On May 9th the IMF announced its new recovery-loan package for Greece, in which it will provide Greece with a total of EUR 30 billion over the next three years. Approximately EUR 5.5 billion will be made available immediately. In 2010, Greece will receive a cumulative EUR 10 billion of financial support, as part of this loan package. The combined IMF and EU support packages are designed to allow the Greek economy and Government three years of “breathing room” before turning to international financial market for any further support.

The loan, regarded by the IMF as the Stand-by Package, is designed to work in conjunction with the EUR 110 billion of financial support provided by the European Union, and allows Greece enhanced access to IMF supportive resources. Announcing the loan approval for Greece, Dominique Strauss-Kahn, IMF Managing Director, said, “Together with our partners in the European Union, we are providing an unprecedented level of support to help Greece in this effort and—over time—to help restore growth, jobs, and higher living standards.”

According to an IMF statement, the monetary assistance will allow the Greek Government to implement its current economic recovery plan. Under the program, substantial efforts will be made by the Government to correct the nation’s high debt-to-GDP ratio, its 13.6 percent of GDP budget deficit, and instate positive growth policies, which should eventually lead to sustainable growth and tax revenues.

Photo by International Monetary Fund