ECB expects Greek action on bad loans, pensions, income tax

FRANKFURT (Reuters) - Greece needs to tackle the high stock of bad loans at its banks, and make changes to its pension system and income tax if it is to pass the first review of its latest bailout, the president of the European Central Bank said on Monday.

The ECB, along with the European Commission and the International Monetary Fund, is part of a trio of institutions responsible for Greece's rescue program.

"The discussions with the Greek authorities are still ongoing and so it's too early to specify a precise timetable for the finalization of the review," Mario Draghi told members of the European parliament in Brussels.

"The authorities need to make a genuine effort to ensure the effective implementation of the NPL (non-performing loans) strategy. This is of crucial importance to ensure a swift resolution of the review."

"On the pension system... the actions will have to improve actuarial and inter-generational fairness. Also, action is needed on the income-tax front."

Greece is being asked to cut pension spending by 1 percent of gross domestic product this year. Athens has refused to cut pensions as part of its bailout, and says it will increase social security contributions instead.

(Reporting By Francesco Canepa)

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