Greece repays IMF loan installment despite cash crunch

Yanis Varoufakis, Greece’s finance minister

Greece’s government has given the order to repay a roughly 450 million euro (USD485-million) loan instalment to the International Monetary Fund due today — a debt Athens had insisted it will honor despite being severely cash-strapped.
The debt stems from Greece’s international bailout, under which the country was extended 240 billion euros in rescue loans from other eurozone countries and the IMF to prevent bankruptcy.
“The order (for the repayment) has been given,” and the payment was being processed and carried out, a Finance Ministry official said on condition of anonymity, in line with ministry regulations.
Doubts about whether Athens could repay the loan had renewed fears the country might default and have to leave the eurozone.
Greece’s new left wing-led government has been locked in strained negotiations with creditors since winning elections in January on pledges to abolish the deeply resented budget austerity measures required by the rescue program.
The country has not received any funds from its rescue loans since last August, and is running short of cash. It hopes to persuade creditors to unfreeze the final 7.2 billion euro bailout installment, and is locked in negotiations over reforms it is proposing in return for the funds.
Greece is unable to tap the international bond market for funds due to sky-high borrowing rates that reflect a lack of confidence in the country being able to repay its debts. It has been surviving on its rescue loans since mid-2010, and the new government won a four-month extension to the main, European part of its bailout in February.
Under the extension agreement, Athens must present a series of fiscal measures to reform its economy that meet the approval of its creditors at the European Commission, European Central Bank and IMF. Authorities are hoping for a final agreement later this month, when finance ministers from eurozone countries meet on April 24 in Latvia. AP