Greek exit fears rise as IMF re­buffs de­lay


Top Euro­pean of­fi­cials and Greece’s fi­nance min­is­ter were on Thurs­day forced to play down fears that the coun­try was poised to exit the eu­ro­zone, af­ter the IMF re­jected sug­ges­tions that Athens would post­pone loan re­pay­ments.

But the per­ilous state of Greece’s gov­ern­ment fi­nances was laid bare when the prime min­is­ter con­firmed he had been re­duced to seek­ing fund­ing sup­port from the wealthy Greek Or­tho­dox Church.

Greek bond yields soared to their high­est point since 2012 as con­cerns mounted that the coun­try would de­fault on bil­lions of dol­lars in debt and be forced to leave the euro area, an event which could shake global fi­nan­cial mar­kets.

But Ger­man Fi­nance Min­is­ter Wolf­gang Schaeu­ble and EU Eco­nomic Af­fairs Com­mis­sioner Pierre Moscovici both said that talks on new fi­nanc­ing for Greece con­tinue on the ba­sis that a deal will be reached and that the coun­try stays in the sin­gle cur­rency zone.

And Greek Fi­nance Min­is­ter Ya­nis Varo­ufakis in­sisted Athens was com­mit­ted to the euro area, de­spite ris­ing talk of a Greek exit or “Grexit.”

The clock is tick­ing to­wards the April 24 dead­line for Greece and the EU to agree on con­di­tions for an­other US$7.2 bil­lion eu­ros (US$7.8 bil­lion) to keep the Athens gov­ern­ment afloat.

Greece’s plight over­took the spring meet­ings of the In­ter­na­tional Mon­e­tary Fund and World Bank, meant to dis­cuss the progress of the world econ­omy and the fight against poverty at large. Greece has large debt re­pay­ments to the IMF loom­ing in early May, and to the Euro­pean Cen­tral Bank in June.

Athens de­nied re­ports that it had asked to put off the re­pay­ments to the IMF to buy time.

But IMF Man­ag­ing Direc­tor Christine La­garde sug­gested the is­sue had been raised — and had been flatly re­jected.

“We have been able to ex­press and ex­plain the pol­icy of the IMF in terms of pay­ment de­lays, and give the prece­dence and his­tory about that to Mr. Varo­ufakis,” she said.

“Pay­ment de­lays have not been granted by the board of the IMF in the last 30 years.”

Clock is Tick­ing

Spec­u­la­tion of a Greek de­fault mounted af­ter Stan­dard & Poor’s cut the coun­try’s credit rat­ing Wed­nes­day to a low “junk.”

And at the same time EU of­fi­cials ex­pressed strong frus­tra­tion with Athens over the pace of the talks.

The Greek gov­ern­ment was also un­der grow­ing pres­sure at home. The gov­ern­ment an­nounced 177 mil­lion eu­ros in new min­is­te­rial spend­ing cuts.

But at the same time thou­sands of min­ers took to the streets over fears of los­ing their jobs, in one of the big­gest la­bor protests since Tsipras’s left­ist Syriza party took power in Jan­uary promis­ing an end to the aus­ter­ity that came with the IMF-EU bailouts.

Seek­ing more sources of money, Tsipras on Thurs­day an­nounced the start of a “dia­logue” with the pow­er­ful Or­tho­dox Church on us­ing cler­i­cal as­sets to boost the strug­gling state cof­fers.

The first Greek pre­mier to be sworn in in a secular cer­e­mony thanked “with all my heart” the head of the church, Ierony­mos II, who re­cently de­clared that the Church’s wealth was avail­able to help re­pay the na­tional debt.

At the IMF head­quar­ters, La­garde out­lined where Athens had to make com­mit to greater re­forms: on pen­sions, tax col­lec­tion and open­ing prod­uct and ser­vice mar­kets.

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