Greece makes IMF payment but it isn’t over yet

Athens has made a payment to the IMF however, the cash strapped country is expected to continue making repayments to creditors in order to avoid default

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

Greece has managed to gather enough funds to make a payment of €200M to the International Monetary Fund (IMF), says the Ministry of Finance. However, Greece has another international obligation where it is expected to make a further repayment of €770M to the Fund on May 12. If a further cash bailout is not accepted, the debt burdened country will default. 

Although Greece has made an interest payment to the IMF, tension rises as the talks between the Greek government and its international lenders turn into a debate about pension and labour reforms.  

Government officials pointed fingers at its creditors, holding their conflicting opinions responsible for the lack of progress the country has made during bailout talks. “Serious disagreements and contrasting opinions between the IMF and the European Commission are creating obstacles in negotiations and high risks,” said officials. 

Greek authority then continued to argue that pensions, labor laws and primary surplus all have  “red lines” over them. “With these facts, there cannot be a compromise. The responsibility lies exclusively with the institutions and their inability to communicate between them.” 

Prior to the interest payment deadline, the European Commission reduced Greece’s growth forecast from 2.5 percent to a staggering 0.5 percent. In a similar fashion, the IMF reduced the country’s growth outlook as they now expect a primary budget deficit of as much as 1.5 percent in 2015.

Although they are struggling, Greek officials continue to push forward in order to fulfill repayment obligations. 

Deputy Prime Minister of Greece, Yannis Dragasak arrived at Frankfurt for the European Central Bank's (ECB) governing council meeting on Wednesday, where emergency funding for crumbling banks will be discussed. 

According to analysts, the ECB will provide further Emergency Liquidity Assistance (ELA) to Greek banks, as they still want Greece to remain in the eurozone however, additional assistance is not expected. 

Nevertheless, the future of Greece’s bailout program is still unclear as talks in Brussels continue.

However, according to the IMF spokesman Gerry Rice there is still hope as long as commitments are met, “there’s an agreed framework in place for dealing with Greece’s debt in the current program and there’s been no discussion of a change in this framework.”

TRTWorld and agencies