Greece cannot make June 5 IMF payment without deal – lawmaker

Greece will not be able to make a payment to the International Monetary Fund that falls due on June 5 without a deal with its international lenders, the government’s parliamentary speaker said on Wednesday.

Athens faces several payments totalling about 1.5 billion euros (1 billion pounds) to the IMF next month and is in talks with the European Union and the International Monetary Fund to clinch a cash-for-reforms deal before it runs out of money.

“Now is the moment that negotiations are coming to a head. Now is the moment of truth, on June 5,” parliamentary speaker Nikos Filis, from the ruling Syriza party, told ANT1 television.

“If there is no deal by then that will address the current funding problem, they won’t get any money,” he said.

Without access to debt markets or aid, the government has found itself locked in tough negotiations as coffers run dry.

A payment of about 750 million euros to the IMF last week was only made after emptying a holding account at the Fund.

Talks with the European Union and International Monetary Fund lenders have dragged on for the past four months. A successful conclusion would release around 7.2 billion euros in aid, but talks have stumbled over pension and labour reform proposed by the creditors and resisted by Athens.

“There is no money for the foreign (lenders) when they have not given us any funds for a year,” Filis said. “We don’t have it to make the payment and this is part of the discussion.”

He said the government would make sure that it has money to pay pensions and wages before servicing debt repayments to the IMF.

Greece’s European lenders on Tuesday played down Greece’s hopes of a swift end to negotiations on an aid agreement and said talks needed to speed up before the country runs out of cash.

Filis said the government is seeking a deal that will not include further pension cuts, aiming for lower primary budget surpluses and a debt restructuring.

Reuters

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.