Greek loan program facing severe headwinds: IMF (by Greg Robb)

WASHINGTON (MarketWatch) - Greece is making progress under the economic program backed by the International Monetary Fund but faces "much stronger" headwinds, said Poul Thomsen, the director of the IMF's mission to Greece, on Tuesday. Thomsen's assessment came as the IMF released a staff review of the program that was the foundation for the IMF executive board's approval last week of the latest 2.2 billion euro aid tranche of its 30 billion euro emergency loan program for Greece. The staff said that risks of the program remain large given the worsening economic outlook for the euro area and weak implementation of the plan by the Greek government. "Structural reforms have fallen short, they are well behind schedule, they are well away from critical mass where people conclude that Greece is doing business in a fundamentally different way," Thomsen said. "This is the main reason why the hoped-for bottoming out of the recession has not happened," he said. The IMF had expected the Greek economy to reach an "inflection point" this year where the recession would bottom out and slow growth would start. The IMF said a key to the success of the program was that Greece and its private-sector creditors complete work on a debt restructuring program that includes a 50% write-down on the country's debt.