Creditors warned of Greek default on May payment of IMF loan
Greek Prime Minister Alexis Tsipras has reportedly warned the country's international creditors that his government would not be able to pay the 750-million euro May installment of the loan it owes to the International Monetary Fund (IMF).
The report of the official warning was revealed by a local Greek newspaper on Sunday, less than a week after Athens admitted to tapping into an IMF emergency holding account to eventually repay this month’s installment of the loan.
Citing European authorities, Greek daily Kathimerini reported that Tsipras wrote to European Commission, the IMF and European Central Bank (ECB) officials on May 8, to caution them that Greece would not be able to meet its May 12 payment deadline unless its foreign creditors agree on releasing a final 7.2-billion-euro tranche of its huge bailout loan.
According to the report, Tsipras also demanded payment for the 1.9 billion euros in profits made by the ECB from Greek bonds purchased in 2010, as well as 1.2 billion euros Athens claims it unduly paid to the European Financial Stability Facility.
In frantic efforts to make the debt payment, the report added, Athens ended up drawing 660 million euros from its IMF holding account, and putting together the remainder of the amount due just in time.
The newspaper further reported that Tsipras also contacted US Treasury Secretary Jack Lew on the issue noting, however, that Athens's creditors viewed the prime minister’s warning as a "possible bluff."
This is while Greece won some support in the latest round of the nation’s debt negotiations as it struggles to keep itself solvent, though eurozone finance ministers have called for more meaningful reforms before they agree to release the funds.
Meanwhile, Tsipras's office is yet to comment on the reports as billions more in loan repayment installments are due over the next three months.
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