IMF approved the EUR 1.7b funds for Greece's bailout program after completing the review.

 EU said yesterday that Greece would need to make EUR 1.6b from privatization, down from prior target of EUR 2.6b.

 

IMF chief Lagarde noted that "urgent steps need to be taken to address concerns about the structure and governance of the privatization program and to improve its effectiveness." Meanwhile, Lagarde also criticized that "given the slow progress in public administration reforms, efforts should focus on ensuring exit of unqualified personnel to create room to hire new staff with the relevant skills."

 

Greece is expected to get another EUR 1b from the bailout EUR 173b bailout program in October, subject to further review.

 

Euro strengthens today, in particular against Sterling on solid Italian bond auction and improvement in confidence indicators.

 

Italy sold maximum target in EUR 6.75b of debts today. EUR 3.75b in 10 year BTP was sold with yield at 4.46%, down from 4.55% in an auction of similar debt. Bid to cover ratio was at 1.32, comparing to prior 1.46. EUR 3b in 5 year BTP was sold with yield at 3.22%, down from prior 3.47%. Bid to cover ratio was at 1.36, comparing to prior 1.30. After today's auction, Italy has completed around 80% of its 2013 funding target.