BRUSSELS—Greece's international creditors acknowledged that all isn't well with the country's mammoth bailout program Monday as their representatives issued a statement saying the outlook for the critically ailing economy is "uncertain," even as they said progress has been made on reforms.
The admission comes as talk of more money needed for the first euro-zone bailout intensifies. Euro-zone governments and the International Monetary Fund, having poured more than €200 billion ($256.64 billion) into the small economy, are set to clash in the autumn over the way to cut Greece's debt. The far worse-than-expected recession, coupled with disappointing privatization attempts and modest tax receipts, look set to boost the bailout bill for Athens.
Experts representing the creditors said they had reached an "ad referendum" agreement with the government in Athens on the latest round of reforms, which includes a controversial scheme to cut the number of public-sector workers and move thousands of them to more useful public services. But, as the phrase "ad referendum" implies, the technocrat inspectors made clear that this agreement was subject to approval by their political bosses.
The statement came at the end of a fraught review of Athens' implementation of bailout commitment by experts from the so-called troika of the European Commission, the European Central Bank and the International Monetary Fund. Euro-zone finance ministers are due to meet later Monday to approve at least a partial disbursement of aid to Athens, while the IMF will make a decision on its own share of aid later this month.
Greece's economy, in free fall for the past five years, has "prospects" of returning to growth in 2014, the experts said in their statement. The bailout plan foresees 0.6% economic growth in Greece next year, for the first time in six years.
The experts said some reforms were stalling and went on to list a number of areas where the Greek authorities are expected to deliver more and faster, including reining in overspending in the public health-care sector. But they said they hadn't agreed to a long-standing request by the Greeks, to cut value-added tax for restaurants and catering form 23%. The Greek government has said that this is a small measure that could make a big difference in boosting consumption in entertainment services, especially as the tourist season is in full swing.
The government in Athens will present the relevant legislation in Parliament and push through with other formal procedures to enact all the commitments they've made to the troika "in the coming days," the statement said.
The decision on the size and timing of the next rescue-package payment to Greece is expected to be made soon, Dutch Finance Minister Jeroen Dijsselbloem said Monday, noting that the tranche could be paid in installments.
Mr. Dijsselbloem told reporters upon arrival at the two-day meeting of euro-zone finance ministers in Brussels that a focus will be on the troika report saying that all isn't well with Greece's bailout program.
Mr. Dijsselbloem also noted that in light of Portugal, which was flung back into the spotlight of the region's financial crisis last week, political stability is crucial for countries receiving international aid.
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