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Greece May Reach Surplus by End of 2013: Lagarde

Greece's budget could be back in surplus by the end of the year, although a lot of work still needs to be done in terms of reforms, the International Monetary Fund's (IMF) Managing Director Christine Lagarde told CNBC.

On Monday Greece secured a 6.8 million euro ($8.7 billion) lifeline from the euro zone on the condition that Athens cuts public sector jobs and delivers other reforms to generate the required cash. The deal prevents the country from defaulting on debt due in August.

Lagarde told CNBC she was pleased with Greece's progress and believed it to be on the road to recovery.

(Watch Now: CNBC's "A Greek Tragedy")

"When I look at Greece, I'm very impressed by the efforts that have been undertaken to restore the fiscal situation of the country. It may well be that by the end of 2013, Greece will be in primary surplus, which is an amazing achievement," said Lagarde.

"A lot needs to be done, whether you're talking about the tax reform, the tax authority's reform, the continuation of the privatization program...the management of the public service - all of that is still on the table and work in progress that needs to be continued. But there have been clear achievements," she added.

As part of the deal agreed on Monday, euro zone finance ministers committed to stagger payments to Greece.

(Read More: Greece Minister: Failure to Meet Bailout Terms Not Our Fault)

Greece has been dependent on financial support from its lenders for over three years now and has been back in the spotlight in recent weeks as the country's coalition government struggled to reach agreement on how to meet the demands of the bailout program.

Tough austerity measures, including deep cuts to government spending, raised taxes and structural reforms, have been unpopular with the Greek public.

International Monetary Fund Managing Director Christine Lagarde
Getty Images
International Monetary Fund Managing Director Christine Lagarde

But a week of talks has led to a promise from the government to reform the public sector, convincing its lenders - the IMF, the European Commission and the European Central Bank - that Greece is on track to rebuilding its economy.

The IMF chief said Greece still has a few more steps to take to improve its financial situation.

"Currently we have a list of actions that have been taken. A few more prior actions before we actually submit the program to the board at the end of July. And then we'll see... as I've said, one step at a time," she added.

(Read More: Greece Sees Deal With Lenders: Official)

Lagarde said that the IMF remained "extremely attentive" to developments in Egypt, where the military last week ousted Mohamed Morsi as president.

The IMF hoped to continue a dialogue with the Egyptian authorities started in August last year, she added.

(Read More: Shooting of Pro-Morsi Protesters Deepens Egypt Crisis)

"We have had a dialogue with the Egyptian authorities because we believe that it's critical for that country to harness financing, but also to have a strong political endorsement and people's support to go into the reforms and the strategy that is needed for that economy to recover," she said.

"We will continue that dialogue, we will remain extremely attentive to what happens on the ground, but I think for the moment the situation has to settle before we reactivate those discussions," Lagarde said.

Contact Europe: Economy

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