Cash-strapped Greece repays first part of IMF loan due in March

Greece repaid the first 310 million euro installment of a loan from the International Monetary Fund that falls due this month, as it scrambles to cover its funding needs, a government source said on Friday.

Prime Minister Alexis Tsipras’ newly elected government must pay a total of 1.5 billion euros to the IMF this month over two weeks starting on Friday.

His government has said it will make the payments but there has been growing uncertainty over the country’s cash position as it faces a steep fall in tax revenues while aid from EU/IMF lenders remains on hold until Athens completes promised reforms.

“The payment of 310 million euros has been made, with a Friday value date,” the government official told Reuters, requesting anonymity.

Athens has to pay three other installments, on March 13, 16 and 20 as part of repayment due to the IMF this month.

Shut out of debt markets and squeezed by a steep fall in tax revenues, Athens is running out of options to fund itself despite striking a deal with the euro zone in February to extend its EU/IMF bailout by four months.

Greece, which has monthly needs of about 4.5 billion euros, including a wage and pension bill of 1.5 billion euros, is not due to receive any financial aid until it completes a review by lenders of final reforms required under its bailout.

Greece’s central bank chief, Yannis Stournaras, met Tsipras on Friday to brief him on the ECB’s decisions a day earlier to start its money printing program.

Stournaras told reporters Greek banks were sufficiently recapitalized and faced no problem with deposit outflows.

“There is full support for Greek banks (from the ECB), there is absolutely no danger,” he said after the meeting.

But he noted that a meeting of euro zone finance ministers on Monday had to be «successful.”

The ECB will resume normal lending to Greek banks only when it sees Athens is complying with its bailout program and is on track to receive a favorable review, ECB President Mario Draghi said on Thursday.

Athens has begun tapping cash held by pension funds and other entities to avoid running out of funds as early as this month. Various short-term options it has suggested to overcome the cash crunch have been blocked by euro zone lenders.

Tsipras’ leftist Syriza was elected on January 25 on a promise to end the belt-tightening that came with the EU/IMF bailouts.


Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.