Not far enough! IMF doubts Greece's willingness to follow creditors' orders

After the extension was granted to Greece, yields on the country's bonds dropped sharply, while shares on the country’s stock market jumped. Athens’s main stock exchange closed almost 10% higher, primarily led by banks. Interest rates on Greek debt maturing between 2017 and 2019 fell by as much as four percentage points.

However, questions were raised on whether the country's leftist government will follow its creditors’ orders on budget cuts and economic overhauls, along with questions on durability of Tsipras's coalition.

The legislation that Alexis Tsipras, Greece’s young prime minister, must implement to address these concerns - and get new rescue money - will test his coalition and the voters who swept him into power last month.

“Greece has won a few weeks,” said a senior Finance Ministry official in Athens, adding that the country now had to focus on collecting overdue taxes and fighting corruption. Now Greece's leaders would have to face questions over policy reversals—including pension cuts, increases to the value-added tax and measures that make it easier to fire workers—that they had ruled out as recently as last week.

“It is difficult to determine how the government can fulfill its promises, including the debt write-off, with this agreement,” Costas Lapavitsas, a lawmaker for Mr. Tsipras’s Syriza party, told Greek TV channel Star.

At the same time, Greece has to hurry to satisfy its creditors. An important test will come in March when some €1.5 billion in IMF loans are due to be repaid, says The Wall Street Journal.

The International Monetary Fund - responsible for roughly one-sixth of Greece’s overall bailout - argued that the new measures outlined by the government didn’t go far enough.

“In quite a few areas…including perhaps the most important ones, is not conveying clear enough assurances that the government intends to undertake the reforms,” the IMF’s managing director, Christine Lagarde, said in a letter published minutes after the finance ministers approved the extension.

The European Central Bank and some eurozone governments expressed similar concerns.

The IMF’s complaints set the period of several months of difficult negotiations between Athens and its creditors. The Greek government will have to flesh out the measures it presented Monday night and actually pass them through its Parliament, in order to receive any cash from the creditors.

That could test the durability of the ruling coalition, which is dominated by left-wing activists who have campaigned for years against the bailout’s austerity measures. The coalition also includes right-wing nationalists eager to assert Greek sovereignty.