* Lenders approve next tranche of Greek bailout
* Say further progress on reforms needed
* Privatisation proceeds of 50 billion sought in 2011-15
* Greek banks must strive for efficiency, seek alliances
EU and IMF inspectors approved on Friday a new 15 billion euros tranche of aid for Greece but said progress was too slow and urged Athens to speed up reforms to meet the targets of its bailout deal.
Greece has slashed public spending, frozen pensions and increased taxes under the terms of the 110 billion euros ($149.1 billion) bailout agreed in May last year to save it from bankruptcy, but was told on Friday it must do more.
In a more critical tone than previous inspection visits, the lenders monitoring the debt-choked country's fiscal progress said Greece needed faster structural reforms in areas such as tax administration and health to secure recovery.
"The program is on track but it will not remain on track without a significant, broad-based acceleration of reforms," said IMF mission chief Poul Thomsen. "Reforms have clearly not yet reached a critical mass needed to secure recovery."
In November, when the previous aid tranche was approved, the lenders sounded more positive, saying that although Greece technically missed full-year targets due to statistical revisions, it had made a huge fiscal effort and met third quarter cash targets.
The bailout was the first ever agreed to rescue a euro zone member, in a crisis that has sent shockwaves throughout the bloc, spilling over to Ireland and threatening Portugal and Spain.
Many analysts believe Greece will not be able to handle its debt mountain when the three-year bailout ends and will need to restructure its debt at some point.
EU, IMF and Greek officials have ruled out restructuring but agree that something needs to be done to help Greece tackle a borrowing hump in 2014/2015. They are examining various options, including extending bailout loan repayments and helping Greece buy back its debt.
TOUGHER PRIVATISATION TARGETS
The 15 billion euro aid tranche must now be approved by euro zone finance ministers and the IMF board. Greece has already received 38 billion euros in aid.
The lenders set an ambitious target for Greek privatisation proceeds, saying 50 billion euros should come in 2011-2015, including 15 billion in 2011-2012. The government's previous target was for 7 billion euros in 2011-2013.
"We see there are three very important sources for privatisations — listed and unlisted companies, the assets the government has in these companies, and commercial real estate," said the EU's mission chief Servaas Deroose.
"To help reduce public debt and support higher investment and growth, it is essential to scale up privatisations," he said.
Economists said pressure for proceeds from state selloffs to pay down debt was increasing.
"The only new thing is the insistence on a more aggressive privatisation programme," said Gikas Hardouvelis, economics professor at Piraeus University. "It's a tough target but not unreasonable as it's the only way to reduce the country's huge debt quickly."
The officials urged Greek banks to sell core assets, cut costs and explore strategic alliances, while it told the government to make state-controlled banks more efficient. They said the government would provide guarantees of up to 30 billion euros for its Greek lenders.
