The International Monetary Fund (IMF), the European Commission (EC) and the European Central Bank (ECB) praised Greece's "strong start" to fix its public finances, the institutions said in a joint statement on August 5.

Representatives of the EC, ECB and the IMF concluded on August 5 the first quarterly review of the Greek government’s economic programme, which the country's cabinet must implement in return for the 80 billion euro bailout by other eurozone countries and the 30 billion euro put forth by the IMF.

In spite of series of interminable strikes and protests, sparked by the highly-unpopular austerity measures, Greece continued to press forwards its efforts to make drastic cuts to government spending.

"Our overall assessment is that the program has made a strong start. The end-June quantitative performance criteria have all been met, led by a vigorous implementation of the fiscal program, and important reforms are ahead of schedule," the statement said.

The statement said that "impressive progress is being made on structural reforms" and welcomed "the Greek parliament’s approval of the landmark pension reform, which is far-reaching by international standards".

Serious labor market reform were well underway, while the implementation of recent tax reform and budget reform was key in order to consolidate fiscal consolidation.

Additional reforms poised for early implementation are in the transportation sector, "where important progress has already been made with liberalisation of road haulage, and energy" the report said.

But despite lavish praise, the IMF and European institutions also warned that "important challenges and risks remain". Although the central government spending was now curtailed below budget limits, local authorities and hospitals were still over-spending.

The staff-level agreement reached with Greek authorities will pave the way for the conclusion of the first review under the loan facility agreement with the euro zone countries and the stand-by arrangement with the IMF, subject to approval by the EC, the Eurogroup of finance ministers, and the IMF’s management and executive board, the statement said.

Such approval will allow the disbursement of nine billion euro in September, including 6.5 billion euro by the eurozone member states and 2.5 billion euro by the IMF. The mission for the next programme review was scheduled for October 2010.

The Greek government is struggling to slash its national debt that stands at about 115 per cent of its gross domestic product (GDP), while its budget deficit hit 13 per cent of GDP last year.