IMF to disburse €2.2 billion in stand-by credit to Greece

The International Monetary Fund (IMF) has approved payment of an amount equivalent to SDR1.9 billion (around €2.2 billion) to Greece as part of a joint bailout with the European Union (EU), even as the region's leaders have planned to meet on 9 December to look for ways to solve the sovereign debt crisis.

The announcement comes after IMF's executive board completed the fifth review of Greece's economic performance under a programme supported by a three-year stand-by arrangement (SBA) for Greece.

This brings total IMF disbursements to Greece under the SBA to SDR 17.5 billion (about €20.3 billion).

''Greece has substantial achievements to its credit, including a large fiscal deficit reduction,'' Christine Lagarde, IMF managing director, said in an e-mailed statement. ''However, the programme is in a difficult phase, with structural reforms proceeding slowly, the economy weak, and the external environment deteriorating,'' se said.

Euro zone finance ministers had, last week, authorized disbursement of their share of the €110 billion rescue package.

This would be followed by Greek bondholders writing down 50 per cent of their holding in a second rescue package. The new aid plan, finalized in October, also includes €130 billion in public funds for Greece.