ATHENS – Greece made a critical payment to the International Monetary Fund on May 12 by using monies the agency had lent it before.
The coalition government of Prime Minister and Radical Left SYRIZA leader Alexis Tsipras tapped reserves in its holding account at the IMF to make the payment, two government officials told Reuters.
With the country running out of money and taking spare cash from cities and towns and state entities to pay salaries and pensions last month, there wasn’t enough in the coffers to make the IMF payment.
Greece must pay another 1.5 billion euros next month, equivalent to what it needs for salaries and pension benefits. Tsipras had said if push came to shove and there wasn’t enough money, he would stiff the IMF – which would create a default and likely lead the country toward the Eurozone exit – and pay workers and pensioners first.
One of the officials said the money the government tapped must be replenished in the account in “several weeks,” although there isn’t enough and Greece is hoping to make enough progress in stalled reforms talks to unblock aid from international lenders – including the IMF – to turn around and give it back to them.