Greece could be denied IMF aid

Officials representing the European Union, the International Monetary Fund (IMF) and the European Central Bank (ECB) - known as the "troika" - want Greece to sack 4,000 state workers by the end of the year and stem a runaway deficit at the country's main health fund before they release the next tranche of its €240bn (£206bn) bail-out.

The troika has raised concerns over a runaway deficit at National Organisation for Healthcare Provision, Greece's main health fund, which has reportedly exceeded its allocated budget by €1.2bn in the first five months of the year.

Following a meeting with the troika on Tuesday, Adonis Georgiadis, Greece's health minister, told reporters that the two sides had reached “total agreement” that there would be no further cuts to health spending. However, he conceded that more budget cuts were on the way.

A meeting of eurozone finance ministers next week will determine whether Greece will receive €6.3bn from its ongoing bail-out in order to redeem €2.17bn of bonds, which mature on August 20.

If the talks fail, the IMF may be forced to withdraw from Greece's bailout to avoid breaking its own rules, which require a borrower to be financed a year ahead. The IMF has to decide by the end of July whether to disburse its next €1.8bn tranche.

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The European Commission denied reports on Tuesday that it had given the country three days to reach an agreement with the troika over its bail-out plan. An EC spokesperson dismissed the report as "something from nothing".

In an effort to meet the redundancy target, Prime Minister Antonis Samaras last month shut down state broadcaster ERT and fired over 2,600 staff.

However, the move backfired, sparking outrage and leading Mr Samaras's smallest coalition ally to abandon the government.

In a broad reshuffle that followed, new ministers were appointed for health, administrative reform, transport, environment, foreign affairs and defence.

Credits: telegraph.co.uk