Greek minister says Athens cannot make IMF debt repayments

Greece cannot make debt repayments to the International Monetary Fund next month unless it achieves a deal with creditors, its interior minister said on Sunday, the most explicit remarks yet from Athens about the likelihood of default if talks fail.

Shut out of the bond markets and with bailout aid locked, cash-strapped Athens has been scraping state coffers to meet debt obligations and to pay wages and pensions.

After four months of talks with its eurozone partners and the IMF, the country’s Syriza-led government is still scrambling for a deal that could release up to €7.2bn (£5.1bn) in remaining aid to avert bankruptcy.

“The four instalments for the IMF in June are €1.6bn. This money will not be given and is not there to be given,” the interior minister, Nikos Voutsis, told Greek Mega TV’s weekend show.

Asked about his concern over a credit event if Athens misses a payment, he said: “We are not seeking this, we don’t want it, and it is not our strategy. Things have matured for a deal of logic.

“We are discussing, based on our contained optimism, that there will be a strong agreement [with lenders] so that the country will be able to breathe. This is the bet.” Previously, Athens has said it is in danger of soon running out of money without a deal, but has insisted it still plans to make all upcoming payments.

The government is under pressure to agree to more cuts and reforms to secure the funding, but Athens opposes measures that it says make the situation worse by preventing recovery from one of the deepest recessions in modern times.

Voutsis said the government was determined to fight against the lenders’ strategy of “asphyxiation”. “This policy of extreme austerity and unemployment in Greece must be hit,” he said. “We will not escape from this fight.”

In an effort to placate the hard-left faction of his Syriza party, Greek prime minister, Alexis Tsipras, said on Saturday that the government was on a final stretch towards a deal but would not accept “humiliating terms”.

Finance minister, Yanis Varoufakis, said Greece had made “enormous strides” at reaching a deal with its lenders to avert bankruptcy but it was now up to the eurozone and the IMF to do their bit.

“We have met those three-quarters of the way, they need to meet us one-quarter of the way,” he told the BBC on Sunday.

Varoufakis also said it would be “catastrophic” if Greece left the euro, predicting it would be “the beginning of the end of the common currency project”.

He said in the past four months Athens had managed to pay public sector salaries, pensions and its dues to the IMF by extracting 14% of national output, doing “remarkably well” for an economy that does not have access to money markets.

“At some point we will not be able to do it and at some point we are going obviously to have to make this choice that no minister of finance should ever have to make,” Varoufakis said.

(Πηγή: theguardian.com)