Greece may get the next 8 billion euro tranche out of a 100 billion euro bailout from the troika of international lenders by next month, despite failing to fully implement a cut in spending agreed with them, the lenders said on Tuesday.
"Once the Eurogroup and the IMF's Executive Board have approved the conclusions of the fifth review, the next tranche of 8 billion euro (5.8 billion euros by the euro area member states, and 2.2 billion euros by the IMF) will become available, most likely, in early November," the international lenders said in a joint statement.
The achievement of Greece's fiscal target for 2011 is no longer within reach, partly because of a further drop in GDP, but also due to slippages in the implementation of some of the agreed measures, the troika said.
"The recession will be deeper than was anticipated in June and a recovery is now expected only from 2013 onwards," the statement said.
The international lenders feared that Greece, which officially confirmed last week it would miss its 2011 and 2012 budget deficit targets, a precondition set by the lenders for providing the next tranche, might default on its sovereign debt without the aid as soon as the second half of October. Many experts expect Greece to default on its obligations in the next six to 12 months.
The expectations of Greece's default have depressed global equity markets in the past few weeks. Greece is implementing tight austerity measures, including major public sector redundancies and budget cuts to avoid default and receive bailout funds from the European Union and the IMF.