Greece vows it won't default

Greece vows it won't default

Greek Finance Minister Yanis Varoufakis (front) and deputy minister for international economic relations Euclid Tsakalotos leave the Maximos Mansion after a meeting with Prime Minister Alexis Tsipras in Athens. (Reuters Photo)
Greek Finance Minister Yanis Varoufakis (front) and deputy minister for international economic relations Euclid Tsakalotos leave the Maximos Mansion after a meeting with Prime Minister Alexis Tsipras in Athens. (Reuters Photo)

ATHENS — Greece won’t default on payments to the International Monetary Fund this coming week even as a lack of bailout disbursements has left government coffers nearly empty, according to the minister responsible for meeting the obligations.

Greece has an IMF payment of about 450 million euros (US$494 million) due on Thursday. With euro zone officials withholding aid payments until an agreement is reached on economic reforms, the government also has to get through a short-term debt auction a day before, to refinance 1.4 billion euros of six-month notes due on April 14.

"The country will pay the IMF on April 9," Alternate Finance Minister Dimitris Mardas said in an interview on Mega TV on Saturday. "There’s money there for payment of salaries, pensions and whatever else is needed for all of next week. That doesn’t mean that there isn’t for the week after. This is a political decision that will be taken, and we will follow whichever political decision."

Greece and euro zone authorities are negotiating over measures proposed by the government to repair its economy, a condition for the release of bailout funds. The standoff has left the country’s banks dependent on European Central Bank loans, with Greece facing the risk of a possible default within weeks and a potential exit from the euro area.

The Greek reform programme includes methods to combat a deeply entrenched culture of tax evasion from top to bottom in society, and to streamline public administration.

"I think this reform plan is a good step. It goes deep enough on the technical details; it can be deepened even more," said Alberto Gallo, head of European macro-credit research at Royal Bank of Scotland.


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