Slowing down the progress of bad debt

Author: | Published: 23 Feb 2017

Greece has been taking decisive action to get back on track. But more needs to be done to address the problem

On February 6 2017, the executive board of the IMF completed the article IV consultation with Greece. The IMF stated in its staff report that Greece has reached important goals in settling political and economic imbalances during the past years. However, progress is still too slow and investment risks remain high. While the new European stability mechanism (ESM) supported programme has helped stabilise the economic situation, the underlying issues hindering the recovery have not yet been fully addressed.

In particular, the IMF called for decisive action in repairing bank and private sector balance sheets, returning to sustainable credit growth, and expressed concern that without reducing non-performing loans (NPLs) rapidly, banks would not be able to provide new lending to viable firms, hence slowing down the recovery.

The issue of...



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