Even as the International Monetary Fund approved the release of a new tranche of aid for Greece, its head, Christine Lagarde, said the nation was in a "difficult phase" as its economic reforms were slow to take effect and its growth very weak.
Reuters reported Monday that the aid package of 2.2 billion euros ($2.948 billion) was approved earlier in the day. The IMF released a short statement that said, "The executive board of the International Monetary Fund today completed the fifth review of Greece's economic performance under a program supported by a three-year Stand-By Arrangement (SBA) for Greece."
The money is part of a joint package of 110 billion euros ($134 billion) from the IMF and European Union that is designed to help Athens ward off bankruptcy. Lagarde, IMF managing director, later urged Greece's new government to implement policies it has agreed to, saying that fiscal adjustment was the most urgent challenge ahead of the coalition government under new Prime Minister Lucas Papademos.
Lagarde was quoted saying, "The new government should use its wider mandate to steadfastly implement the program, which is the best way to help Greece manage the risks it now faces."
If Greece had not received the money, it would be out of funds by the middle of the month. Still, Lagarde warned that the country must stick to its agreement, and push economic reform to promote growth in productivity. She added that there must be considerable participation in the proposed bond exchange program among private investors so that the IMF could continue its support and shore up Greece's financing needs.