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Greece taps emergency funds to pay IMF debt

Greece taps emergency funds to pay IMF debt
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Greece is reportedly examining a cash for reform deal to pay its creditors as it is predicted to run out of cash within weeks.

A emergency IMF holding account has been emptied to repay 750-million euros due to the international lender, highlighting the dire state of the country’s finances.

A government official told Reuters that Athens used about 650-million euros from the holding account and 100 million euros from its own cash reserves to make the payment on Monday.

One economist, Charalabos Gotsis told euronews the government has to calm fears of another default.

“As far as wages and pensions are concerned there is no problem, as they are covered from current state revenues, on that front we are fully covered,” said Gotsis.

“But as far as obligations to creditors are concerned, the country disposes only enough reserves to cover the next repayments, not beyond mid-June.”

On Monday, Greece’s finance minister described the situation as “terribly urgent” and said a deal to release further funds was needed by the end of the month.

Our Greek correspondent Symela Touchtidou says although the government may reach agreement with its creditors, it will still have to fight a fresh battle: “Any new measures must have the coalition government and parliament’s approval, and getting this won’t be easy.”

A cash for reform deal appears the most likely solution to this latest crisis but Greece’s difficult negotiations with its creditors suggest there’s limited scope to change its economic policy.