After a three-hour meeting that ended yesterday, IMF envoy Poul Thomsen said there had been “great progress” in finalizing the package, according to SKAI. “The meeting went well. We made great progress. We will take a break and come back in early September,” Thomsen was quoted as telling reporters after the meeting.

Sources told SKAI that before the meeting the envoys provided government officials with a document setting out specific proposals for measures. Government officials reportedly agree with many though not all of the proposals.

According to ANA, discussions with the troika will continue in order to finalise the ‘equivalent measures’ proposed by the Greek side for inclusion in the 2012 budget. Everything should be concluded by September, ahead of the scheduled Eurogroup meeting. The troika will leave Athens, to return in early September to finalise the negotiations.

According to sources, the package includes reductions to auxiliary pensions, to lump sums paid on retirement and to social benefits a long with the introduction of a ceiling on total pension amounts. The retirement age is to increase to 66, from 65, while low-level pensions are expected to be trimmed by up to 6%. Also, the operational spending of ministries is to be cut more than originally planned.

After finalising the proposed fiscal cuts with the troika inspectors, the government will take them through parliament in September or October, Reuters writes. It adds that the junior coalition partners, the Democratic Left and PASOK, are expected to raise some objections and may evenlose deputies during the debate but the cuts will ultimately be approved.

The IMF analysis points out that a return to the drachma would signal a sudden change to the live of the people in Greece.

By contrast, the report suggests Greece will have better results through a gradual fiscal adjustment if it stays in the eurozone. The IMF report also forecasts that such astate of affairs would also lead other countries out of the eurozone causing a serious blow to the bloc’s banking system.

According to an official transcript, Poul Thomsen, head of the Internatinal Monetary Fund during a seminary session at the IMF argued: “the pace of structural reforms that we have seen, you know, certainly during 2011, is not consistent with success. It will lead to failure. So there is need for a significant reinvigoration of structural reform. There is obviously some concern among investors whether Greece can deliver that. “

Poul Thomsen, will visit the country on his own after the May 6 election before a mission visit takes place the following month, according to Sunday’s Kathimerini.

“We need assurances that whoever is in power after the election and reasonably wishes to make some changes in economic policy will be in line with the targets and the basic framework of the agreement,” Thomsen was quoted as saying in an interview with Kathimerini.

Troika inspectors, are expected to visit Athens in June, a month after the elections, to check on progress in meeting fiscal targets preparing plans for budget cuts of nearly 11 billion euros for the following two years.