Greece ramps ups pressure in debt talks after delaying loan ...| MENAFN.COM

Thursday, 18 August 2022 05:19 GMT

Greece ramps ups pressure in debt talks after delaying loan payment

(MENAFN- The Peninsula) Greece has raised the pressure in the make-or-break negotiations with its EU-IMF creditors after postponing a loan repayment due Friday, playing for more time to reach a deal that meets its anti-austerity programme.

Athens had been scheduled to repay the International Monetary Fund 300 million euros ($340 million) but late Thursday it announced it would bundle all four IMF repayments totalling 1.6 billion euros due this month, postponing the deadline to June 30.

While the decision may have taken Greece's eurozone partners by surprise, Athens maintained that the exceptional move, permitted by the IMF only once before, "had been on the table since the previous payment" a month ago, Greek Economy Minister Giorgos Stathakis said in an interview with the BBC.

The announcement of it taking that option came just a few hours after IMF chief Christine Lagarde said Thursday she was "confident" Greece would make Friday's remittance.

"The Greek authorities have informed the (IMF) today that they plan to bundle the country's four June payments into one, which is now due on June 30," IMF spokesman Gerry Rice said, citing rules allowing debtor countries to regroup "multiple principal payments falling due in a calendar month."

Dodging the threat of an immediate default, Greece has bought more time to negotiate with its creditors - the European Union, IMF and European Central Bank - who are demanding tough reforms before releasing the final 7.2 billion euros in bailout funds.

But the move rattled investors, with the Athens Composite Index falling more the four percent by mid-day Friday, as it was a de facto acknowledgement by Greece that it is quickly running out of money.

Many worry that a default would set off a chain of events that could lead to a messy exit from the euro for Greece.

- 'Extreme' and 'unacceptable' -

Prime Minister Alexis Tsipras's radical left government is seeking less harsh fiscal and reform requirements attached to the loans from the three official creditors, who in turn have expressed dissatisfaction with Greece's efforts to roll back some earlier reform promises.

A Greek government source on Thursday described the creditors' position as "extreme" and "unacceptable".

Tsipras is set Friday evening to address the Greek parliament, explaining to his hardleft Syriza party the status of the negotiations.

"On two particular points, related to adjusting the fiscal targets for 2015 and 2016, we will not accept the proposed measures," said Stathakis.

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