Greece makes IMF payment amid signs of bailout progress
Cash-strapped Greece scraped together a €200 million (US$222 million) repayment to the International Monetary Fund on Wednesday amid signs its long-stalled bailout negotiations were making some progress.
The payment came as Greek government officials continued their whirlwind European tour and Prime Minister Alexis Tsipras spoke to French President Francois Hollande on how to push matters forward.
Greece has a much larger commitment of about €770 million to make to the IMF Tuesday. All indications are it will struggle to make that payment as well as meet some pensions and salaries due later that week.
A potential Greek debt default could set off a chain reaction that jeopardises its membership in Europe's joint currency and roils the global economy.
Hence the importance of reported progress in Greece's talks with representatives from the European Commission, European Central Bank and IMF that could spill into Monday's meeting of the eurozone's 19 finance ministers.
Greece's left-wing government has been locked in negotiations with its creditors for the past three months over reforms required to unlock the remaining €7.2 billion instalment of its €240 billion bailout.
In Brussels, technical talks that started last week were extended beyond Wednesday amid hopes for a breakthrough. A eurozone official, who asked not to be identified because the negotiations were ongoing, confirmed there was now visible progress after the talks had been bogged down for weeks.
Meanwhile, Greek Finance Minister Yanis Varoufakis was in Rome to discuss the issue with his Italian counterpart Pier Carlo Padoan, before heading to Madrid on Friday to meet his peer Luis de Guindos.
And Prime Minister Alexis Tsipras spoke by phone with European Commission President Jean-Claude Juncker Wednesday, and both said that "constructive talks should continue."
They issued a joint statement saying the two discussed "progress made in the talks ... over the last few days" and spoke of details of the reforms Greece needs to implement.
According to the statement, those include modernising the pension system "so that it is fair, fiscally sustainable and effective in averting old-age poverty.” They also discussed "the need for wage developments and labour market institutions to be supportive of job creation, competitiveness and social cohesion."
The EU and IMF also sought to downplay talk that they are at loggerheads over the approach to Greece following criticism by Greek officials. In a statement, they said they "share the same objective of helping Greece achieve financial stability and growth."
Facing an acute liquidity problem, the Greek government has already ordered state enterprises, including municipalities and schools, to transfer their reserves into a Bank of Greece account where they can be used as a loan by the state.
Wednesday's repayment of interest on IMF's loans was made without any problems. "The payment is proceeding normally," a finance ministry official said, on condition of anonymity in line with government regulations.