Eleven Latin American countries represented by Brazil did not not back the latest International Monetary Fund bailout payment for Greece, which was authorised by the Fund's board on July 29.
Brazil's executive director at the IMF, Paulo Nogueira Batista, said on July 31 that the lending agency's latest report on Greece cited risks that it may not be able to repay its IMF loans if its recovery program falls off track.
The unusual public statement said Brazil abstained from the IMF Executive Board vote that approved the payout of 1.7 billion euros this week.
Batista said Greece's implementation of austerity measures — conditions of its massive international bailout — has been "unsatisfactory in almost all areas" and assumptions about growth and ability to sustain debt payments "continue to be over-optimistic."
Meanwhile, just two days after the IMF board gave its approval for the release, the Fund said in its report that Greece needs to take more action to promote growth and deliver promised structural reform, and pointed out that there is a potential shortfall of up to €11bn in Greece's bailout programme over the next two years.
However the Fund did say that Greece has made "exceptional" progress in stabilizing its economy and remains on course to emerge from a near six-year recession in 2014
Greece is the recipient of a mammoth bailout, of around €240bn, administered by the EU and the IMF. Analysts think that it is highly likely the country will need a second debt haircut - this time debt held by sovereign lenders, for example other EU member states, will have to be shaved off as in spring 2012 private debt holders took a hit.
But it is thought that the issue will not be put on the agenda before the German general election takes place in September.
Greece has seen a 25 percent drop in output since a 2007 peak, and unemployment rate from under 10 percent to nearly 27 percent, Europe's highest rate.
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