Auditors from the European Union and International Monetary Fund began a new probe today into Greek budget cuts to judge whether a new €9 billion loan should be granted in September.
Greece was rescued from imminent default three months ago with huge loans from the EU and IMF, and its banking sector is heavily reliant on special measures by the European Central Bank.
The Greek crisis caused huge strains within the euro zone and European Union which, together with the IMF, now regularly audit the progress the Greek government is making in imposing radical spending cuts, tax rises and structural reforms to correct public finances.
The experts were to spend the day at the finance ministry for talks with Finance Minister George Papaconstantinou, and the president of the council of experts at the ministry George Zanias. They were also to meet the governor of the central bank and the leaders of trades unions and employers.
The audit is part of the agreement in May when the EU and IMF agreed to lend Greece €110 billion for three years. This was conditional on action to reduce the public deficit from nearly 14% of output in 2009 to less than 3% in 2014. The target for this year is a deficit of 8.1% of gross domestic product.
A central factor in the crisis which began to break over Greece towards the end of last year was that official statistics had been misrepresented for years. Last week, the statistics agency became independent of the government.
In May, Greece received €20 billion, of which €14.5 billion came from the European Union and €5.5 billion from the IMF. It is due to receive two more loans, each of €9 billion, comprising €6.5 billion from the EU and €2.5 billion from the IMF, in September and December.
Papconstantinou has said several times that he is confident that the second instalment will be paid in September.
