Greece to make April IMF payment, but uncertainty reigns
Greece is due to make its 459 million euro ( US$ 495 million) April loan payment to the IMF Thursday following days of uncertainty, but the European nation’s ability to honor its debts remains a source of acute anxiety to creditors.
As Greek Prime Minister Alexis Tsipras launched a two-day charm offensive in Moscow on Wednesday, the order for the payment had already reached the Bank of Greece, a source familiar with the details told AFP.
Additionally, interest payments of just under 400 million euros and the renewal of 2.4 billion euros in six- and three-month treasury bonds due to mature on April 14 and 17 were also assured, according to the source.
It would be “impossible for Greece not to service its debts this month,” the source said.
But despite government reassurances and the raising of 1.14 billion euros from the sale of sixmonth bonds on Wednesday, mostly to domestic buyers, Greece remains in a precarious position, shut out from international debt markets and reliant on short-term bonds for borrowing.
Greek banks are dependent on the European Central Bank for financing, but the eurozone’s central bank no longer accepts Greek sovereign bonds as collateral for loans.
Christine Lagarde said late Sunday that Greek Finance Minister Yanis Varoufakis had pledged to make the payment on time in a meeting in Washington, but that failed to quell speculation that the hard-left government was finding it increasingly difficult to raise money to pay its debts.
Since 2010, Athens has received two successive loans from the EU and the IMF totaling 240 billion euros in exchange for tough austerity measures and sweeping economic reforms.
Tsipras’s government, which took power in January, has engaged in difficult negotiations with European leaders to continue receiving support while easing the austerity requirements in order to boost economic growth.
Experts from the IMF and the European Union are scrutinizing a list of economic reforms proposed by Athens in a bid to unlock another 7.2 billion euros in loans to stave off possible bankruptcy.
Tsipras himself fueled market fears over Greece’s readiness to pay its debts when he warned German Chancellor Angela Merkel in a letter last month that Athens would not be able to service its debt without more financial help from the European Union.
And in a move that risks further irritating European neighbors, Tsipras has made no secret of seeking closer ties to Russia at a time when Moscow is at loggerheads with the European Union over the conflict in Ukraine.
A man makes his way past various goods for sale at a market street in Athens, on Thursday, April 9.