IMF still sees 'large uncertainty' over Greek comeback

(WASHINGTON) - The International Monetary Fund said Thursday that considerable uncertainty still hangs over the Greek economy, despite the country announcing it will exit an IMF-EU bailout this year as scheduled.

IMF spokesman William Murray told a reporters there has been renewed investor interest in some parts of the Greek economy, locked in a sharp contraction since 2008.

But he added: "There are a lot of challenges ahead."

"The uncertainty is still large. But our experience suggests that once a virtuous circle is under way, confidence can return quite fast," he said, declining to speculate just when such a turnaround will happen.

On December 30, Prime Minister Antonis Samaras said Greece was on track to exit the IMF and European Union rescue plan this year and to fund its needs from the commercial market.

"In the new year, Greek debt will be officially declared viable, meaning there will be no need for new loans and new bailout agreements," he said.

But as Greece assumed the rotating EU presidency for a six-month stint, European Commission President Jose Manuel Barroso urged Athens to stay the course of painful economic reforms.

"This is not the time to slow down the pace of reforms," Barroso said, adding: "My point is very clear: (adjustment) programs work, so we should not waste the efforts so far."

Greece was first bailed out by the EU, the IMF and the European Central Bank for 110 billion euros ($151 billion) in 2010.

When that effort failed to stabilize the country's finances, veering Greece dangerously close to exiting the eurozone, the country got a second rescue in 2012 worth 130 billion euros, plus a private sector debt write-off totalling more than 100 billion euros.

According to the 2012 plan, the IMF's funding for the Greek government should continue through 2016, while the EU-ECB support should end this year.