BUSINESS

Gov't plans early IMF loan payoff

EIRINI CHRYSOLORA

TAGS: Finance, Politics

The government is planning to pay off some of the country’s loans from the International Monetary Fund early, with the aim of using it to win support ahead of this year’s general election, claiming that it is showing the IMF the way out of Greece.

Speaking to the SYRIZA parliamentary party in the aftermath of the negative remarks in the IMF report, Prime Minister Alexis Tsipras implied on Wednesday that the IMF loans will be repaid early, saying, “We have a plan for the IMF to stop being here, and we will soon put this into action.”

This constitutes a plan that has been pending for some time, concerning the repayment of part of the outstanding balance of the IMF loans. It has already been discussed with the creditors.

Nevertheless the implementation of this plan requires the approval of the European Stability Mechanism, and sources aware of how the ESM operates say that this approval will only become more likely after the eurozone is satisfied regarding Greece’s progress with the prior actions of the second post-program assessment and the Eurogroup ratifies the disbursement of the 1 billion euros due to Athens.

Sources estimated on Wednesday that once the disbursement is approved, it is possible that the early payoff of the IMF loans will be approved too, as Athens will be seen as having fulfilled its pledges.

Finance Ministry sources say that if the 1 billion euros is disbursed after the April 5 Eurogroup meeting and an application on the IMF loans follows, it will take no more than 40 days for the decision to be made, so that the government will be able to use this to win support ahead of the elections in May. Kathimerini understands that these discussions have started and have already advanced, although no formal application has been submitted to the ESM yet.

The ministry’s plans provide for the payment of loans amounting to 3.8 million euros, which is approximately the sum of the installments due in 2019 and 2020. This is because those loans have a particularly high interest rate of 5.13 percent.

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