Greek Cyprus waits for bailout scheme

NICOSIA - Agence France-Presse

Men passes a school wall with writing in ‘Troika out’ in the city of Nicosia.

Greece has salvaged its economic recovery program following months of political uncertainty but still faces “enormous” challenges and will need new financial support from fellow eurozone states, the International Monetary Fund has said.

The IMF issued its views in a 260-page report after it approved this week a long-delayed $4.3 billion loan installment to Greece.

Poul Thomsen, headed of the IMF’s mission to Greece, said the government’s implementation of its reforms program had rapidly improved since earlier in 2012, when it was delayed by two inconclusive elections.

“The political situation in Greece ... had thrown the program significantly off track to the extent that there was a standstill in implementation (of reforms),” Thomsen said, speaking to reporters on a conference call from Washington D.C.

“The government has worked determinedly on catching up and ... I am glad to conclude that the program is back on track.”

Conservative Prime Minister Antonis Samaras formed a coalition government following general elections in June last year, ending seven months of political uncertainty after the previous Socialist government agreed to form an interim alliance to guarantee continued payment of bailout loans and the future of the country in the euro bloc. The Samaras government pushed through a major new round of austerity measures to lower the public deficit and debt. The measures, however, have also been hurting the economy and eroding standards of life - the Greek economy is expected to contract for a sixth consecutive year in 2013.