A senior
German official said on Tuesday there was no reason to believe Greece would be
in default after a 300 million euro payment to the IMF falls due on June 5.
Greece must
repay four loans totaling 1.6 billion euros ($1.76 billion) to the IMF next
month, starting with a 300 million euro payment on June 5.
If no deal
is reached within EU/IMF for new loans to be disbursed to Athens, Greece is
likely to default on the IMF loan repayment. This would start a process that
could lead Greece out of the euro zone.
But in Berlin
a senior German official, speaking on condition of not being named, said it was
encouraging that Greece had signaled its desire to meet the looming debt
obligations.
"I
find it encouraging, if it is true, that the Greeks signaled yesterday their
desire to repay the 300 million euros to the IMF on June 5," the official
said.
"I
think there is reason to believe that we will not be talking about a default
situation around June 5, neither before or immediately thereafter."
Talks
between Greece and its creditors on more funding have been dragging on since
late January, when the left-wing government of Alexis Tsipras took power on
promises of ending austerity and reversing some reforms agreed with the
creditors by the previous government.
Despite
progress on other issues, a deal cannot yet be reached because the creditors
believe that to repay its huge public debt, Greece should be running a higher
primary surplus, or the balance before debt servicing costs, than Athens is
prepared to accept.
To achieve
that surplus, the creditors believe Greece should raise its Value Added Tax
rate and balance its pension’s budget.
Greece,
however, believes a lower primary surplus would make the economy grow faster,
increasing the chances of the creditors getting repaid.
(Πηγή: reuters.com)
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