Greece to miss €300m IMF loan repayment on Friday

Greece to miss €300m IMF loan repayment on Friday

Athens, June 5, 2015/ Independent Balkan News Agency

By Zacharias Petrou

Greece will not make Friday’s €300m payment to the International Monetary Fund, but instead will make all the June payments totalling over €1.6bn at the end of the month.

Athens has already informed the International Monetary Fund of the goverment’s intention.

Although the bundling practice is not unprecedented and is allowed by the IMF’s rules, it has not been used in four decades. The last time it was used was by Zambia in the 1970s.

When asked by reporter in Brussels if Friday’s payment will be made, Prime Minister Alexis Tsipras told reporters “don’t worry about that”.

The delay to Friday’s payment gives the government more time to reach an agreement in its negotiations with lenders.

“The end is not in sight in negotiations between Greece and its international lenders on a cash-for-reforms deal”, German Chancellor Angela Merkel said on Thursday.

“The talks are far from reaching a conclusion,” Merkel said during a news conference in Berlin.

After talks with creditors revealed huge differences with Athens, the Greek government has moved closer to default and possible exit from the eurozone after telling the International Monetary Fund it would not be making Friday’s debt repayment.

The decision to delay payments appears to be a show of defiance by Athens against what it sees as unacceptably tough terms being demanded by its creditors.

Bloomberg reports the European Union is setting a new deadline of June 14 for an agreement adding hat the Euro Working Group expects Greece to respond to an European Union proposal to conclude the country’s bailout by June 8, according to a person familiar with the talks.

Reports in the international press suggest more top-level meetings are on the cards in coming days. Tsipras is set to travel to Brussels again for talks with the Commission and Eurozone heads. The leaders of France and Germany are also reportedly set to meet on Monday to discuss Greece joined by EC president J.C. Juncker and European Central Bank president M. Draghi.

The Greek Prime Minister will address parliamentarians on Friday. He is expected to brief the House on latest developments in the negotiating process with creditors. It will be interesting to see how his speech will go down with his Syriza cadres. The left-wing party’s MPs and officials reacted to the Tsipras-Juncker meeting appearing rather displeased with developments.

The reforms proposed by Greece’s creditors are the toughest ever asked, First Deputy Parliamentary Speaker Alexis Mitropoulos said in a TV interview. These reforms will force Greece to leave the euro he added.

Deputy Shipping Minister Theodore Dritsas said Athens would not “surrender” to demands by its international creditors in the negotiations.

Syriza MP Rachel Makri urged the government not to pay the remaining installments to the IMF.

Syriza parliamentary spokesman, Nikos Filis said the PM should call an early election if creditors offer Greece an ultimatum containing austerity measures while Yannis Milios, a member of the Syriza central committee said the government should impose capital controls and freeze payments to creditors.

Finally, describing the lenders’ draft agreement as “most brazen and provocative,” the deputy social security minister, Dimitris Stratoulis, insisted that Greece still had “alternatives solutions.”