Review of Greek Program Won't Be Easy, Says EU Source
06/17/2012| 06:25pm US/Eastern
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BRUSSELS--The first review of Greece's second bailout program threatens to be a difficult process, with the country further off track from its agreed fiscal targets and a new government just taking office, a person familiar with the situation said Sunday evening.
"It's not a secret that the political process has had an impact" on Greece's implementation of the bailout program, the EU source said. "There has been a further deterioration in the fiscal position of the country...The review will not be an easy exercise."
On Sunday, Greek voters handed conservative party New Democracy a victory in the country's second election in a month and a half, paving the way for a coalition government that is expected to try to stick to the contours of March's second Greek bailout package.
That result was welcomed by euro-zone finance ministers Sunday evening, who in a statement urged Greece's politicians to move quickly to form a new government. They said Greece's troika of official lenders--the European Commission, the International Monetary Fund and the European Central Bank--could return to Athens once a new government was in office to "exchange views...on the way forward and prepare the first review" of the bailout program.
A troika review must take place every three months for Greece to receive the next tranche of its bailout package.
The source said the troika could "easily" return to Athens by the end of the month.
While some European officials have signaled that Greece may earn some flexibility on its bailout program if voters picked a government who accepted the need for continued austerity, the official said that was not likely.
Greece has signed up to "the minimum needed to keep the country" on track to reduce its debt burden to sustainable levels, the person said. Greece's euro-zone partners are "not going to renegotiate the" program.
Greece's austerity targets are built around the country's cutting its debt to below 120% of gross domestic product by 2020.
Write to Laurence Norman at Laurence.norman@dowjones.com
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