Greece ready to make IMF payment amid default fears

Athens is fast running out of cash and its creditors are tying further aid to reforms

Greek prime minister Alexis Tsipras delivers a speech during a plenary session of the Parliament in Athens. Photograph: Simela Pantzartzi/EPA

Greek prime minister Alexis Tsipras delivers a speech during a plenary session of the Parliament in Athens. Photograph: Simela Pantzartzi/EPA

 

Greece will pay a loan tranche due on April 9th to the International Monetary Fund on time, its deputy finance minister said on Friday, seeking to quell fears of default after a flurry of contradictory statements on the issue in recent days.

Greece is fast running out of cash and its euro zone and International Monetary Fund lenders have frozen bailout aid until the new leftist-led government reaches agreement on a package of reforms.

That prompted the interior minister to suggest this week that Athens would prioritise wages and pensions over the roughly €450 million payment to the IMF, though the government denied that was its stance.

Euro zone officials then said Greece told them it will run out of money on April 9th, which the finance ministry denied saying. “We strive to be able to pay our obligations on time, Dimitris Mardas told Greece’s Skai TV. “We are ready to pay on April 9th.”

Athens has not received bailout funds since August last year and has resorted to last-ditch measures such as borrowing from state entities via repo transactions to tide it through the cash crunch.

The government is hoping approval of its latest reforms package will unlock remaining aid of €7.2 billion under its EU-IMF bailout and lead to the return of about €1.9 billion in profits made by the European Central Bank on Greek bonds.

Mr Mardas said state revenue in March had topped targets without providing figures, adding that progress had been made in talks with the country’s official international on its latest the reforms list.

German chancellor Angela Merkel has said Greece would receive fresh funds only once its creditors approve the comprehensive list of reforms Athens has presented.

Meanwhile, Russia says Greek prime minister Alexis Tsipras and president Vladimir Putin will discuss European Union sanctions against Russia at talks next week in Moscow. “Russia-EU relations will be discussed in light of the sanctions policy applied by the EU and the rather cold attitude toward this sanctions policy from Athens,” Mr Putin’s spokesman, Dmitry Peskov, told reporters Friday.

Russia has been building ties with European countries that may help it scuttle the sanctions. The 28-member bloc will need unanimous approval to prolong measures targeting Russia’s financial and energy industries which expire in July. Mr Putin and Mr Tsipras will also discuss the economic situation in the Balkan country, Mr Peskov said.

Greece, the EU’s most- indebted state, hasn’t asked Russia yet for any financial aid, he said. Greece opposes EU sanctions imposed against Russia over the conflict in Ukraine, Mr Tsipras reiterated last week, denouncing the approach as “senseless” and calling for a negotiated solution.

Reuters/Bloomberg