Washington: The International Monetary Fund (IMF) said on Wednesday it would release €3.2 billion in aid to Greece that had been frozen for months amid fears about the country’s ability to surmount its debt crisis.
The IMF executive board approved release of the funds after completing two reviews of Greece’s economic performance under an IMF loan programme that is part of an international rescue also supported by the European Union, the institution said.
In completing the first and second reviews, the board also waived some performance criteria and modified others, the Washington-based institution said in a statement.
The payment is part of a four-year €28 billion IMF loan granted to Greece on 15 March last year to support the Greek authorities’ economic adjustment program.
The loan is an Extended Fund Facility (EFF) that gives a country exceptional access to IMF resources above what it normally would be able to borrow.
The EFF arrangement is part of a joint package of financing with euro area member states amounting to €172 billion over four years.
Under EFF, IMF released an initial €1.6 billion but froze subsequent payments in view of Athens’s failure to meet the loan programme’s criteria and concerns that the debt burden was unsustainable.
After intense negotiations with European authorities, IMF in late November abandoned its 2020 goal for reducing Greece’s debt burden to 120% of gross domestic product, and accepted a compromise of a 124% debt-to-GDP ratio.
Greece’s debt currently stands at about 170% of economic output.