With Greece saying it’s about to go broke – but still pay its lenders – doubts are rising whether it can do both or either, world press reports say.
Greece, IMF Hold Crucial Debt Talks
The New York Times – Landon Thomas Jr.
As a crucial date approaches for Greece to make a major debt payment, the markets are yet again weighing the possibility that the country could actually default on its loans.
Such an outcome — a decision by the Greek government not to pay its creditors — has generally been seen as remote, even since the left-wing Syriza government came to power in January.
But now, after months of bitter, inconclusive negotiations over the austerity measures Greece would have to impose to secure desperately needed cash from Europe, Greek government officials are grappling with very limited options for handling their cash squeeze.
On April 9, Greece must pay 458 million euros, about $503 million, to the International Monetary Fund, a date and sum that in recent weeks have come to loom large for investors, many of whom worry how the markets would absorb a messy Greek default.
Following the meeting Ms. Lagarde said she welcomed “confirmation by the minister that payment owing to the fund would be forthcoming on April 9th.”
Mr. Varoufakis said that Greece would meet all its obligations, although neither party provided details in terms of how Greece would secure the funds to make this happen.
Greece Reassures IMF of 450M Euro Payment
Financial Times – Shawn Donnan
Greece has assured the International Monetary Fund that it will not miss a €450m payment to the fund due on Thursday, easing fears that Athens was set to become the first developed country in the IMF’s history to default on its debts to the institution.
Yanis Varoufakis, the Greek finance minister, on Sunday met for more than two hours with Christine Lagarde, the IMF’s managing director, after flying in for what was billed by the fund as an “informal meeting”. He is due to meet senior US officials on Monday.
In a statement issued after their meeting, Ms Lagarde said Mr Varoufakis had confirmed that Athens would make the next payment due on April 9 as part of the plan agreed by a previous government to repay the IMF for Greece’s first bailout in 2010.
Greece this year is due to repay the IMF more than €9bn as part of a repayment plan that fund officials insist cannot be rescheduled unless Athens agrees to a fresh IMF programme, something the new government does not want to do.
Ms Lagarde also said that Mr Varoufakis had agreed that discussions in Brussels on Greece’s proposed new reforms, as well as efforts by the IMF and European officials to conduct “due diligence” in Athens, would “resume promptly on Monday”.
Default Greece’s Worst Option
Bloomberg – Mohamad A. El-Erian
Finance Minister Yanis Varoufakis’s surprise decision to meet with International Monetary Fund Managing Director Christine Lagarde in Washington on Sunday added to the suspense over whether Greece would make its April 9 debt payment to the fund.
This is a consequential question because defaults on loans from the IMF, one of the world’s few “preferred creditors,” are extremely rare. When they have occurred, the debtors have tended to be fragile or failed states in the developing world and not advanced countries, let alone members of the euro zone, one of the world’s elite economic groups.
The very fact that the 450 million euros (almost $500 million) payment is in doubt reflects the extreme economic, financial and socio-political circumstances facing Greece. It is hard to imagine any outcome to this predicament that would improve Greece’s lot.
Having struggled to restore economic growth, and with an unemployment rate of 26 percent, Greece isn’t generating enough revenue to meet all of its obligations. Even though the economic logic mostly works in its favor, Greece’s ability to mobilize additional funding from abroad has stalled due to both mismanaged negotiations and creditor intransigence.
Meanwhile, Greece’s domestic socio-political context makes it difficult for the government to make payments to the IMF, especally as it struggles to pay salaries and finance basic social services.
The post World Press View: Down To The Wire For Greek Default appeared first on The National Herald.Source: The National Herald