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IMF Critiques Greek Economic Overhaul

The Greek government has made a strong start to its economic overhaul, but risks still remain, according to the EU, ECB and IMF.

ATHENS, Greece (


) -- The Greek government has made a strong start to its economic overhaul of the debt-ridden country, although risks still remain, according to the

European Union

, the

European Central Bank

and the

International Monetary Fund


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"Our overall assessment is that the programme has made a strong start," said EU, ECB and IMF officials, in a joint statement released on Thursday. Reforms are ahead of schedule, they explained, but added that "important challenges and risks" remain.

The Greek authorities have kept spending significantly below budget limits at the state level, according to the statement, helping offset slippages in areas such as local government, hospitals and social security funds. Europe and the IMF, however, are urging Greece to further strengthen its tax administration, particularly reducing tax evasion by high-income and wealthy individuals.

"This is essential to secure tax revenues and to promote the overall fairness of the adjustment programme," they explained.

Officials also welcomed the fact that Athens has commissioned a strategic review of the banking sector and a due diligence for state banks. "Continued close monitoring of the financial sector will be important in the period ahead," they added.

The statement also warned that Greece is still unable to access international capital markets except for placement of short-term T-bills, but noted that market sentiments appear to be improving. "The key challenge facing the Greek authorities remains to establish a strong track record of policy implementation in order to regain access to international capital markets," they said.

EU, ECB and IMF officials gave the assessment as part of their first quarterly review of the Greek government's efforts, following a massive bailout earlier this year. Greece is being supported by an 80 billion Euro loan from eurozone countries and a 30 billion Euro Stand-By Arrangement with the IMF.

-- Reported by James Rogers in New York

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