Greece’s €459m debt payment to IMF due on Thursday
Eurozone country is close to running out of cash and the ECB, the EU and the IMF have frozen further aid until they reach an agreement with its left-wing government
Greece is due to make a €459m (£332m) loan repayment to the International Monetary Fund on Thursday, with anxiety mounting about the heavily indebted country’s ability to service its debts.
According to a news report this morning, the IMF lodged a demand for payment at the Bank of Greece on Wednesday, as Greek prime minister Alexis Tsipras arrived in Moscow on a two-day charm offensive.
It would be “impossible for Greece not to service its debts this month,” an unnamed source told the AFP news service in Athens.
IMF chief Christine Lagarde said on Sunday that Greek finance minister Yanis Varoufakis had pledged to make the payment on time at a meeting in Washington. His comments came after Greece’s interior minister Dimitris Mardas suggested last week Athens would prioritise wages and pensions over the IMF payment.
Even though Greece managed to raise €1.1bn from the sale of six-month bonds on Wednesday, it remains in a precarious position – shut out of international debt markets and dependent on short-term bonds for borrowing.
Independent City analyst Louise Cooper said: “This [bond sale] indicates that right at the moment, Greece is not expected to default. Although who bought that debt remains unknown (Greek banks are reportedly under pressure from ECB not to buy any more Greek government debt), we do know it has some cash to repay the IMF and so does the troika know that!”
Since 2010, Athens has received two bailout loans from the European Union and the IMF totalling €240bn in return for implementing tough austerity measures.
Greece’s three lenders at the European Central Bank, the EU and the IMF have frozen further aid until officials reach an agreement with the left-led government on a new package of economic reforms.
Meanwhile in Brussels, eurozone experts have gathered for a second day to scrutinise the list of reforms proposed by Athens, needed to unlock another €7.2bn in loans to stave off possible bankruptcy.
Michael Hewson, chief market analyst at CMC Markets, said: “Yesterday’s talks between Greece and the eurogroup [of eurozone finance ministers] ended with ministers issuing the Greeks with an ultimatum to present acceptable proposals for fiscal, pension and labour market reform in the next six days, whatever that means.
“Given that we’ve been here so many times before, ultimatums generally only work when there is a threat of a significant sanction at the end of the deadline, and short of throwing Greece out of the euro it would seem that any sanction is likely to be limited, particularly if Greece continues to muddle through.”
Source: TheGuardian – Greece’s €459m debt payment to IMF due on Thursday
