Pressure builds on Greece as yields climb
Greece's bonds tumbled yesterday, pushing 10-year yields to the highest in two years as the country comes under pressure to secure a funding deal or risk default.
The European Commission warned that Athens must intensify its efforts to reach a deal that will satisfy Eurozone finance ministers when they meet next week in Latvia, saying Brussels was not satisfied with the level of progress made so far.
And the pressure intensified yesterday as International Monetary Fund (IMF) chief Christine Lagarde warned that Greece's shouldn't delay debt repayments amid a report by the 'Financial Times' that the country informally approached the Washington-based fund to seek a delay. Athens later denied the report.
Much of the action has now switched to Washington where G20 finance ministers and central bankers are gathering for the IMF's spring conference.
Most of the protagonists in the Greek saga will be there including Finance Minister Yanis Varoufakis who is due to hold talks with both President Barack Obama and European Central Bank chief Mario Draghi.
Eurozone officials are doubtful that a deal will be struck with Greece next week on economic reforms for bailout funds. Both the Greek government and its creditors have expressed the need for an agreement, at least in outline, to be reached when euro zone finance ministers meet in the Latvian capital Riga on April 24.
But Athens has yet to produce a programme of reforms that is deemed acceptable.
Greece's finance ministry denied yesterdat a report by the 'Financial Times' that Athens approached the International Monetary Fund to request a delay in loan repayments.
"Athens did not approach the IMF to request or ask any details about delaying any loan repayment," a finance ministry official said.
The newspaper, which cited officials briefed on the talks by both sides, said that the approach was informal and that Athens was persuaded not to make a specific request for an extension.
Greece must repay loans totalling about €1bn to the IMF in May.
German Finance Minister Wolfgang Schaeuble said on Wednesday that Greece must find a way to regain the trust of the financial markets.
Mr Schaeuble has been at odds with the Greek government of Prime Minister Alexis Tsipras, elected last year on promises to end austerity.
Mr SChaeuble said the country was delivering better-than-expected recovery results "up until the last election."
On Wednesday, Standard & Poor's downgraded Greece's credit rating to CCC+ with a negative outlook, citing the prolonged negotiations, suggesting it sees default as increasingly likely.
(Additional reporting Reuters)