Thursday 18 January 2018

Greece makes IMF payment but dashes hopes of quick deal

Greece’s prime minister Alexis Tsipras
Greece’s prime minister Alexis Tsipras

George Georgiopoulos and John O'Donnell

Greece made a small interest payment to the International Monetary Fund yesterday but European lenders dashed hopes for a cash-for-reforms deal before a more crucial, bigger instalment Athens must pay next week.

Leftist Prime Minister Alexis Tsipras' government sought to shift blame the previous day onto the Eurozone and IMF for a lack of agreement in the three-month-old negotiations. He said each was setting different "red lines" on multiple issues from pension and labour reforms to the primary budget surplus.

But EU officials accuse Greece of failing to produce enough concessions ahead of Monday's Eurogroup meeting of Eurozone finance ministers and the group's chief, Jeroen Dijsselbloem, said an agreement then is no longer possible.

"Since the last Eurogroup quite a bit of progress has been made," he said. "I'm getting some positive reports from the talks in Brussels. Still, lots of issues have to be solved, have to been deepened more, with more details, so there will be no deals next Monday. We have to be realistic."

Athens is hoping the Eurogroup registers significant progress in the talks, possibly enabling the European Central Bank to let Greek banks buy more short-term government debt.

Thomas Wieser, head of the Eurogroup Working Group which prepares decisions for the ministers, said that as things stood there was no prospect of a deal by next Monday.

"Colleagues in Brussels have been battling with fiscal issues, VAT issues, labour market reforms and I think it is fair to say that the judgement of everybody, including the Greek colleagues, is that we will not be there yet on Monday," Mr Wieser said.

Deputy Greek Finance Minister Dimitris Mardas said Athens had sent €200m to the IMF yesterday but declined to comment on next week's €750m payment to the IMF.

With some municipalities, regional and public entities resisting an order to turn over cash reserves to the central bank, the government is struggling to scrape together enough money to meet the IMF payment and pay wages and pensions later in the month.

A government source said the money raised so far by the decree has fallen short of a target of €2.5bn and that Athens is expected to continue resorting to other one-off measures such as holding off some payments to suppliers.

Little detail has emerged from the "Brussels group" talks between Greece and the IMF, European Commission and ECB. However, Tuesday's angry statement by a Greek government official suggested the sides are still far apart. "There has neither been big progress nor a stalemate," a source at the negotiating table told Reuters.

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