Greece 'to return to growth in 2014'

Written By Unknown on Senin, 15 April 2013 | 19.15

15 April 2013 Last updated at 05:04 ET

The troika of international creditors to Greece has said the country's economy will start growing again next year and it will be able to contain its debts.

The troika, which includes the European Commission, the European Central Bank (ECB) and International Monetary Fund (IMF), said the next slice of financial support would be released soon.

The release of the funds follows a review by the troika.

They said Greek debt was containable.

Greek debt is currently 160% of the country's gross domestic product (GDP) and the IMF says it must be cut to 120% of GDP to be sustainable.

The troika recently reviewed the country's economic progress.

They said eurozone countries could soon approve the release of 8.8bn euros (£7.5bn; $11.5bn).

In a statement, they said: "The disbursement of the related 2.8bn euros from the EFSF [European Financial Stability Facility] tranche remaining from the previous review could be agreed soon by the euro area member states."

Capital bolstered

Greece has been supported by 270bn euros in bailouts since 2010.

In order to qualify, the country has had to cut spending and raise taxes, which has led to widespread hardship and prompted violent protests from some citizens.

Greece is trying to strengthen its banks so they can start to lend again.

The troika said that the country had almost completed the bank recapitalisation.

Most of the 50bn euros has been made available to the four leading Greek banks.

The troika's statement said: "The mission's assessment is that this will provide adequate capital, even under a significantly adverse scenario. These capital buffers will thus ensure the safety and soundness of the banking system and of its deposits."

In another development, the Greek finance minister, Yannis Stournaras, said the country would aim for a "primary budget surplus" - the surplus before taking into account debt financing costs - this year.

The troika said that it would consider granting more assistance if the country achieved this, something Mr Stournaras said he was keen to bring about.

Talks between Greece and the troika have been underway since March.

Last week, shares in Greek banks fell up to 30% after plans to merge two of them were called off, amid fears the new entity would be too big to manage.

A finance ministry source said a planned merger would not now go ahead, although the four would be recapitalised.

All four banks had either already called or were set to call shareholder meetings to approve capital increases.


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