On Friday, the International Monetary Fund approved just over €3 billion to Greece, the latest instalment of a rescue package aimed at helping the country pull back from an impending debt default.

The move by the executive board had been expected after a decision last week by eurozone finance ministers to give Greece their portion of a €12 billion loan payment that is part of a €110 billion package agreed last year.

This action by the IMF, with new managing director Christine Lagarde in the chair, came as European banks, insurance companies and other financial institutions were trying to get the private sector involved in helping save Greece from default.

The 17 countries that use the euro will continue with the IMF to prop up Greece’s struggling economy in the coming years, with a second package of aid loans to be completed in September.

Lagarde said the raft of reforms, spending cuts and tax hikes the government has been carrying out as part of the conditions for receiving bail-out funds “is delivering important results: the deficit is being reduced, the economy is rebalancing and competitiveness is gradually improving”.

However, she said, Greek officials still face significant challenges, including meeting a target of getting its burdensome debt down to 7.5 per cent of gross domestic product in 2011 and to less than three per cent by 2014.

Lagarde said: “Greece’s debt sustainability hinges critically on timely and vigorous implementation of the adjustment programme with no margin for slippage, and continued support from European partners and private sector involvement”.

She said the government’s privatisation strategy is a critical step toward boosting investment and reducing the debt burden.

The European Union and the IMF Fund had said they would refuse to pay out the next instalment unless Greek parliamentarians approved a new five-year package of €28 billion worth of spending cuts and tax increases and a €50 billion privatisation plan before the end of June. The parliamentarians delivered what was asked of them, cheering up global financial markets but provoking violent demonstrations on the streets of Athens.

Lagarde, a former French finance minister, took over as head of the 187-member lending institution on Tuesday, replacing Dominique Strauss-Kahn, who resigned in May to fight charges of sexually assaulting a New York City hotel chamber maid. Lagarde is the first woman to head the organisation since it was founded after World War II.

Greece targets top 10,000 tax cheats

Greece’s Finance Ministry says it will hire a group of lawyers and accountants to pursue the country’s top 10,000 tax cheats and boost the crisis-hit country’s weak revenues.

A ministry statement on Friday said that while an estimated 900,000 Greek residents and companies owe the state €41 billion in taxes and fines, 90 per cent of that money is owed by 14,700 taxpayers and firms.

Weak revenues – blamed on the recession and problems with tax collection – have caused the country to miss its budget reduction targets in 2011, frustrating rescue creditors in the European Union and International Monetary Fund.

Earlier this year, Greece promised to raise an additional €11.8 billion in revenue by 2013, partly by cracking down on tax evasion.