The International Monetary Fund said Friday it was releasing 3.2 billion euros ($4.6 billion) to Greece but warned there was "no margin for slippage" in the country's reform program.

The funds, part of the 110 billion euro joint bailout with the European Union for the debt-stricken country, came as Europe's leaders and banks struggle to achieve an ostensibly voluntary restructuring of the country's debt to relieve pressure on Athens and avert a forced default.

The IMF said Greece was making "some progress" to get back on a sustainable fiscal path, but stressed the government had to press ahead on reforms required under the IMF-EU program.

But it also said that Europe's richer countries needed to keep up their backing for Athens.

"Greece's debt sustainability hinges critically on timely and vigorous implementation of the adjustment program, with no margin for slippage, and continued support from European partners and private sector involvement," new IMF chief Christine Lagarde said in a statement.

Lagarde said the Greek bailout is "delivering important results," and the Fund predicted the country would return to positive economic growth in the first half of 2012.

"The fiscal deficit is being reduced, the economy is rebalancing, and competitiveness is gradually improving," she said.

"However, with many important structural reforms still to be implemented, significant policy challenges remain," she said, citing the need for more work on narrowing the country's fiscal deficit and increasing economic productivity to restore growth.

The IMF statement said Greece needed to address high pay packages for public sector workers, the possibility of shutting down inefficient state firms, and widespread tax evasion.

It called the government's privatization goals -- required by the IMF-EU program to raise government revenues -- "a critical step toward boosting investment and growth" as well as cutting state debt.

"While the target of selling 50 billion euros of state assets by 2015 is very ambitious, the establishment of an independent privatization agency should help realize transparent and timely implementation."

It also cited the need for reform of the high labor taxes and the "inefficient judicial system."

The Fund meanwhile warned that Greek banks need to boost their capital but said it is "critical" that the European Central bank keeps providing liquidity to the country's financial system.

The IMF has made its largest commitment ever to a single country, 30 billion euros, as its part of the joint rescue of Greece.

Friday's release takes the total disbursed in the three-year program to 17.4 billion euros.

It came a day after private sector creditors and international banks met in Rome to make progress on a possible restructuring of the country's debt.

While many economists and financiers say a rescheduling of the debt is necessary, ratings agencies have warned that this could put the country technically in default, even if the rescheduling is voluntary.

Because a ratings downgrade in that case could make it more difficult for the ECB to keep supporting the country, the bank has condemned the idea of a restructuring of Athens' debt.

"No credit event, no selective default, no default. That is the present message of the governing council," ECB president Jean-Claude Trichet said on Thursday.