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Athens faces critical loan repayment deadline next month


economy

Athens faces critical loan repayment deadline next month

Mixed messages, political posturing and doomsday scenarios – all coming out of Greece ahead of a critical loan repayment deadline at the end of next week.

“We haven’t got the money. We won’t pay. It’s that simple,” Deputy Foreign Minister Nikos Chountis told Greek Television on Monday.

But enormous strides have been made at reaching a deal according to Finance Minister Yanis Varoufakis.

Next month the country must repay 5.2 billion euros in short term bills and the IMF will come calling for 1.6 billion euros, with 300 million of that due on Friday week.

There is no respite in July with the ECB added to the creditors. It will expect a repayment of 3.5 billion euros. Athens must reach a deal with the IMF and EU to secure the final tranche of its bailout.

And that deal will be crucial in stopping the government having to rob Peter to pay Paul – meeting wage and pensions obligations but also having the cash to meet its creditors demands.

“This government has the responsibility to pay its obligations in Greece as well as abroad. The liquidity problem is known, we want to be consistent in our obligations, and for that reason we hope there will be a deal soon which will give us breathing space with Greece’s liquidity problems,” Greek government spokesman Gabriel Sakellaridis told reporters.

Saying the banks coffers are dry has been dismissed by eurozone officials as a negotiating tactic to raise pressure on creditors to disburse aid.

But one analyst warned the negotiating positions appear to be toughening adding this is “not a time for complacency”.

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