Inspectors from the International Monetary Fund (IMF) and European Union are expected to announce their verdict on Greece's efforts to rein in its budget deficit this week, as thousands continued to protest against threatened austerity policies on Monday, according to dpa. Greece is on the brink of insolvency despite securing a 110-billion-euro (155-billion-dollar) bailout from the EU and the International Monetary Fund (IMF) last year. Efforts to meet tough deficit reduction targets are being hampered by a deep recession, high unemployment and weak revenues - leading to questions on whether Greece will be able to return to bond markets as planned in 2012. The austerity measures have significantly reduced the incomes of many Greeks, causing widespread anger. About 5,000 people protested in Athens' central Syntagma square on Monday, in a demonstration which was considerably smaller than the more than 40,000 which gathered a day earlier to protest the country's economic crisis. EU and IMF inspectors are currently in Athens examining the country's fiscal progress before approval of the release of the fifth instalment totaling 12 billion euros of aid under the emergency bailout. The country's political leaders failed to reach a consensus during austerity talks last week as the EU warned that the country would get no further aid unless there was a united front on more economic reforms and faster sales of state assets to reduce its massive deficit, as was the case in Ireland and Portugal. Unless Europe commits itself to meet Greece's 2012 funding needs, the IMF is refusing payout of its 3.3-billion-euro share of the June tranche of aid. On Monday, German officials refused to speculate on the latest IMF, ECB and European Commission findings, expected by the end of the week. Finance Ministry spokesman Martin Kotthaus said officials were looking at two key issues. The first was how well - or how badly - the Greek reform programme was running, and where the problems lay. He said this included the question of Athens' privatization programme, and whether the process could be speeded up. Secondly, it was important to establish Greek debt sustainability, as the IMF demanded that Greece should be able, in part, to finance itself on the markets by early 2012. "What can the Greek government do to strengthen market trust in Greece and its debt sustainability?" Kotthaus said. The final report was likely to be discussed at an Ecofin meeting of EU finance and economic ministers on June 20, Kotthaus added. Greece is believed to need up to 70 billion euros on top of the 110 billion euros it is already due to receive through the end of 2013. European officials are hoping that half of the extra funding will come from the sale of state assets and the extension of maturities for bonds held by private investors. Greek Finance Minister George Papaconstantinou has warned that, without new funds, the country would not be able to meet its obligations and default. But on Monday, he assured the Greek public that the government "was close to reaching an agreement with the EU/IMF for the fifth instalment of funding." Last week, the Greek government announced a new round of austerity measures totalling 6 billion euros, including accelerating privatizations of government holdings and tax hikes. Athens said it is determined to raise 50 billion euros by 2015 through the privatization of the country's two biggest ports, and of OTE Telecom and Hellenic Portbank. European leaders remain at odds over how to handle Greece's debt crisis, with credit ratings agencies warning that a debt default would impact other eurozone countries. With a debt running a more than 330 billion euros, many experts have said that the country will be left with no other alternative than debt restructuring. Major ratings agencies have said that adjusting debt maturities would be considered the same as a default-like credit event, triggering a domino effect for banks and other eurozone sovereigns. Concerns over Greek solvency have reawakened fears that the eurozone debt crisis - which has already pushed Ireland and Portugal to seek bailouts - may spread.
