Bank of Greece governor Yannis Stournaras has warned that the country must secure an immediate release of further bailout funds from its creditors or risk recession.
“Any further delay in completion beyond this month will feed a new circle of uncertainty,” he told Greece’s parliament.
“Such a vicious cycle could return the economy to recession and a rerun of the negative developments that took place in the first half of 2015.”
On Monday, the European Commission acknowledged that Greece had “significantly” beaten its 2016 fiscal target. Greece was able to achieve a surplus on its budget of 2.3 per cent of GDP according to the Commission, but IMF managing director Christine Lagarde warned on Monday that the country would not be able to carve out a special deal with its lenders.
"We have been asked to help, but can only help at terms and conditions that are even-handed. In other words we cannot cut a special sweet deal for a particular country because it is that country," Lagarde told Reuters.
"We need to apply the principles that we apply to all countries because we are lending international community money."
European Commission vice president, Frans Timmermans said the “Greek economy is recovering” and described the IMF’s position as “too pessimistic”.
The Commission and the IMF are at odds over whether the Greek state can achieve growth and live within its means over the next few years. Commission projections see Greece’s surplus widening to 3.5 per cent of GDP by 2018. The IMF believes the surplus will struggle to get past 1.5 per cent of GDP unless Greece implements further austerity.
Greece is required to repay six billion euros of pounds in July.