The IMF loan, which is part of a cooperative package of financing with the European Union amounting to about $146 billion over three years, includes conditions requiring Athens, whose sovereign debt crisis has shaken global financial markets, to implement strict austerity measures such as tighten its fiscal belt and raise taxes.
The IMF said around €20 billion ($29 billion) in financial support would be immediately available to Greece from the EU/IMF package.
In a brief statement after a nearly three-hour meeting with the IMF board, the IMF Managing Director Dominique Strauss-Kahn acknowledged that Greece faces tough times ahead, but he called the reform program credible, socially well-balanced, and achievable.
IMF: “Today IMF demonstrated its commitment to doing what it can to help Greece and its people. The road ahead will be difficult, but the [Greek] government has designed a credible program…Implementation is now the key,” the Managing Director stated.
IMF officials have said they’re confident the measures are enough to bring Geeece, which entered the global recession with deep-rooted vulnerabilities and has a debt burden of more than 115% of GDP, back from the brink.
Total financing for the Mediterranean country this fiscal year from the IMF/EU fund would come to about $43 billion.