Pressure rises on Greece as IMF rebuffs repayment delay

GMT 17:42 2015 Thursday ,16 April

Arab Today, arab today Pressure rises on Greece as IMF rebuffs repayment delay

Christine Lagarde
Washington - AFP

International Monetary Fund chief Christine Lagarde on Thursday played down talk of Greece delaying its debt payments, maintaining pressure on Athens as it runs out of money to pay.

With an April 24 deadline looming for Greece to reach a deal on new financing from EU creditors, markets are fearful that it could fail to pay its debts and split from the eurozone.

Lagarde cut off one possible avenue of relief, saying there was little chance that Greece would be able to delay payments of hundreds of millions of dollars to the Fund next month.

"We have never had an advanced economy ask for payment delays," the Fund's managing director told reporters in Washington, at the opening of the IMF-World Bank spring meetings.

"It's clearly not a course of action that would actually fit, or be recommendable in the current situation," Lagarde said.

"Payment delays have not been granted by the board of the IMF in the last 30 years."

Greece has denied reports that it has already formally asked for a delay in payments to the IMF, and Lagarde's response suggested that any such approach would not be welcomed.

In this, the IMF is closing ranks with Greece's European Union creditors as the clock ticks on Athens reaching a new financing deal with its bailout lenders before its next debt payment comes due.

Prime Minister Alexis Tsipras' new Greek government has sought an easing of austerity and reform conditions on the IMF-EU bailout loans, but creditors have refused to budge.

"We continue to work with other institutions and the Greek authorities. Talks are ongoing. However at this stage, we are not satisfied with the level of progress," European Commission spokesman Margaritis Schinas said Thursday.

The official target for an interim agreement is the April 24 meeting of eurozone finance ministers in Riga, Latvia.

Riga was meant "to be able to take stock of the situation (but) we have to have more progress than we actually have," Schinas said.

A European Union source, meanwhile, said that "nothing has happened over the past few days. Absolutely nothing."

Athens desperately needs a deal to unlock 7.2 billion euros ($7.7 billion) -- the last tranche of a 240-billion-euro bailout accorded in 2010 -- but the EU and IMF want better reforms from Greece.

Greece must repay about one billion euros to the IMF in the first half of May. It owes nine billion euros to the European Central Bank in July and August.

Speculation of a Greek default mounted after Standard & Poor's cut the country's credit rating Wednesday to a level recognizing that borrowers are vulnerable to default.

Yields on the country's bonds soared Thursday to their highest level since the end 2012, the last time Greece was extremely close to default.

Finance leaders and analysts generally said they still expect a deal to be done, and that Greece will remain in the eurozone.

"I would like to say that I am quite confident it will not happen," German Finance Minister Wolfgang Schaeuble said in New York Wednesday, referring to a "Grexit".

Greek Finance Minister Yanis Varoufakis was to meet with global financial officials in Washington this week during the IMF-World Bank meetings, but Lagarde's comments suggested he would find little support.

Lagarde stressed that any debt payment delay for Greece would be the equivalent of granting it new financing, placing more burden on IMF members, some of which are in worse situations.

Instead, she said Athens needs to proceed with reforms to boost stability and create jobs.

"My advice is to get on with the work."

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