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Head of International Monetary Fund (IMF) Dominique Strauss-Kahn urges the Greek authorities to adopt new measures to reduce wages and prices in the country. He welcomed the plan for aid, which was finally approved on Sunday by the Member States in the eurozone, but is adamant that Greece should undertake immediate measures to strengthen their competitiveness. "The only effective remedy for the financial problems of Greece is deflation," said the IMF chief, quoted by Reuters and added: "Just as the European Commission recommends." 

Greece has the amount of €30 billion by the member states of the eurozone in the form of credit at lower than rate than the market one. Another €10-€15 billion is granted by the IMF and the amounts from both sources will be collected into a single fund (pool), controlled by the European Commission. The total amount of €45 billion is planned for the credit needs of Greece until the end of 2010, provided that it cannot credit itself by the international markets. Chief economist of Goldman Sachs Europe, Eric Nelson commented that this measure protects the country from financial collapse in the short term but in long term Greece needs to restore its economic viability. Moody’s weekly report indicates that adjusting the parameters of financial aid for Greece is in a positive direction. This will help restore some of the lost confidence in local economy, but experts estimate that the government of Giorgos Papandreou must continue the process of consolidation of public finances according to the rules of the eurozone. 

The first reaction of international markets was assessed as positive after on Monday the spread-index of the ten-year Greek government bond fell to 346 basis points. However, the Greek financial analysts argue that the initial decrease in interest on government crediting is not indicative of the future behavior of international markets. The crisis date for Greece is around May 20 of this year when the country will need to seek a loan of around €20 billion in order to be able to meet its public needs during summer. If by mid-May the spread-s do not significantly decrease, the Greek Government will be forced to resort to the combined financial assistance from the EU and IMF. "We hope that when the time comes for the second major crediting in May, the market interest rates will have fallen enough not to have to resort to the financial aid mechanism. We are ready to pay a little more (higher interest), but to continue to receive credit from the international markets, as other European countries do," said a senior source from the Ministry of Finance. 

All analysts are unanimous that whatever the results are at the end of May, the next step for Greece will be to take a series of measures to regain the lost competitiveness compared to other eurozone countries. The goals hereinafter, according to economic experts, are to restore the country's power production and increase exports, which is currently an extremely low percentage of the total GDP. The investments in the private sector must increase and expenses in the public sector must be reduced and medium-term programs for production growth must be prepared. At the same time, Greece will have lower costs of production, without reducing its quality, in order to be able to reach more competitive levels of the already existing production.