THE EUROPEAN COMMISSION will transfer of a second tranche of loans to Greece, worth €9bn, to help the country with its economic troubles, the Financial Times reports.
Measures so far taken by the Greek government have been praised by Ollie Rehn, the EU Economics and Monetary Affairs Commissioner. Prime Minster George Papandreou’s move to cut public sector wages and reduce capital expenditure has resulted in the Greek budget deficit being reduced more quickly than anticipated.
Greece has managed impressive budgetary consolidation during the first half of 2010 and has achieved swift progress with major structural reforms.
Nevertheless, Rhen also warned of the possibility of problems arising in the future for Greece:
Despite the significant progress made, challenges and risks remain. The main immediate challenge is to safeguard adequate liquidity and financial stability of the banking sector.
On 7 September, Eurozone finance ministers will meet to officially approve the next instalment.
Greece is currently the only Eurozone country to remain in recession. It’s economy contracted by 1.5% in the second quarter of this year, marking the country’s seventh consecutive period of negative growth.