Wednesday 17 January 2018

Greece pledges to repay IMF loan

Yanis Varoufakis is in the US for talks with the International Monetary Fund and the US Treasury
Yanis Varoufakis is in the US for talks with the International Monetary Fund and the US Treasury

Greece has told the International Monetary Fund that it will repay a substantial loan that is due this week.

Finance minister Yanis Varoufakis and IMF managing director Christine Lagarde met in Washington DC for an "informal discussion" on the debt-stricken nation's reform programme.

Greece is in difficult negotiations with creditors over its bailout programme, which has delayed the disbursement of the final 7.2 billion euro (£4.7 billion) aid tranche.

That has led to a cash crunch, forcing the government to tap reserves.

Athens has been hoping for at least a partial release of the final bailout instalment in order to avoid default and to pay salaries and pensions.

"We both agreed that effective co-operation is in everyone's interest," Ms Lagarde said. "We noted that continuing uncertainty is not in Greece's interest."

Greece must repay a 450 million euro (£331 million) IMF loan instalment on Thursday.

Deputy finance minister Dimitris Mardas said on Saturday that Greece has the funds but it is up to the government to decide whether to pay.

Greece and its creditors have been negotiating which reforms it should enact to its economy to receive more funding.

Ms Lagarde said discussions will resume "promptly" today between technical teams and authorities in Athens and in Brussels.

Mr Varoufakis will meet US Treasury officials today.

Since 2010, Greece has been dependent on rescue loans worth 240 billion euro £176 billion) from other eurozone countries and the IMF.

Prime Minister Alexis Tsipras was elected in January on promises to abolish the deeply resented bailout conditions, which included deep spending cuts and tax hikes.

However, the new Syriza government has since softened many pre-election promises.

Press Association

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