Greece will default on payments to the International Monetary Fund (IMF) next week even as a lack of bailout disbursements has left government coffers nearly empty, according to the minister responsible for meeting the obligations.
Greece has an IMF payment of about 450 million euros ($494 million) due on April 9. With euro-area officials withholding aid payments until an agreement is reached on economic overhauls, the government also has to get through a short-term debt auction a day before, to refinance 1.4 billion euros of six-month notes due April 14.
“The country will pay the IMF on April 9,” Alternate Finance Minister Dimitris Mardas said in an interview on Mega TV on Saturday. “There’s money there for payment of salaries, pensions and whatever else is needed for all of next week. That doesn’t mean that there isn’t for the week after. This is a political decision that will be taken, and we will follow whichever political decision.”
Greece and euro-area authorities are in negotiations about a package of measures proposed by the government to repair its economy, a condition for the release of bailout funds. The standoff has left the nation’s banks dependent on European Central Bank loans, with Greece facing risk of a possible default within weeks and a potential exit from the euro area.
Prime Minister Alexis Tsipras will visit Moscow next week, with Russia ready to discuss easing restrictions on Greek food products, according to Russian government officials. Russia isn’t considering financial assistance to Greece, they said.
Greece and euro-area authorities pledged to press ahead with efforts to reach an agreement, according to three officials with knowledge of a conference call of finance ministry deputies on Wednesday. Greece sent more details on its budget and economic proposals ahead of the call, including combating tax evasion and streamlining public administration.
“There is a cash shortfall problem if there isn’t any disbursement to Greece,” said Alberto Gallo, head of European macro-credit research at Royal Bank of Scotland Group Plc, said in an interview. “I think this reform plan is a good step. It goes deep enough on the technical details; it can be deepened even more.”
Source: Bloomberg
