Friday

19th Aug 2022

Greece looking for fresh money as deadlines loom

  • An IMF repayment is due Friday (Photo: Fotolia)

Greece is facing two deadlines on Friday (6 March) and Monday that will test its financial capacities and political abilities.

On Friday, the Greek government is due to repay €298 million to the International Monetary Fund (IMF) from a loan from the first bailout in 2010. In total, it will have to disburse €6 billion in March for debt repayments.

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  • Yanis Varoufakis says Greece's debt repayment should be linked to growth (Photo: Council of European Union)

And on Monday, Finance minister Yanis Varoufakis is expected to present reform proposals at a meeting of euro finance ministers (Eurogroup) in order to convince his partners to unblock a part of the four-month loan extension approved on 24 February.

Eurogroup president Jeroen Dijsselbloem said in a recent Financial Times interview that "maybe there can be a first disbursement" from the €7.2 billion extension if Greece "starts the programme before the whole renegotiation is finished".

According to the Kathimerini newspaper, Greece will on Monday present six measures addressing the humanitarian crisis in the country and administrative reform, as well as measures to settle overdue debts to the state and improve tax collection.

It should also announce the creation of a fiscal council and of a new body for targeted tax inspections.

The measures should be presented first at a technical level on Wednesday or Thursday. Greece will then have a first indication of its partners' intentions.

Varoufakis has promised his country will meet its March commitments.

"March is solved. We are in the process of securing funds to cover the entire four-month period," he said on Greek television on Tuesday.

But with tax revenues falling since the start of the year and weak economic activity, Greece is estimated to have only €4 billion in its coffers and some experts are worried that it could run out of money in the coming weeks.

The Frankfurter Allgemeine Zeitung reported that the Greek government has started to borrow money from the country’s pension funds for a period of up to 15 days in order to have available cash.

Varoufakis, for his part, repeated that Athens' priority remains restructuring the country's debt and setting sustainable growth goals.

"Debt repayment should be linked to the growth rate. This is a red line for us", he said.

As a concession before Eurogroup talks, the Greek government removed a debt-cutting provision from its planned legislation

Yet tough negotiations are still likely. EU commission president Jean-Claude Juncker indicated as much in an interview with Spanish daily El Pais.

He said Greek prime minister Alexis Tsipras "has to explain [to the Greek people] that some promises with which he won the election will not be fulfilled".

"Greece is a never-ending story, with two programmes that will become three", adding fuel to rumors of a third bailout at the end of the current loan extension.

Greece needs 'new arrangement' on debt deal

Greece has indicated it will shortly ask for further assistance, in a sign the bailout extension agreed last week is just the beginning of a longer battle between Athens and its creditors.

Merkel downplays speculation on third Greek bailout

German chancellor Angela Merkel on Wednesday downplayed talk of a third bailout package for Greece and said that an EU-US trade deal can still be completed this year if there is enough political will.

Stop 'wasting time', Dijsselbloem tells Greece

Officials representing Greece’s creditors will return to Athens this week, as Tsipras’ left-wing government is told to stop wasting time in talks on the bailout programme.

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