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Greece meets April IMF payment, but uncertainty reigns

Greece on Thursday made a scheduled 459 million euro (S$665.4 million) loan payment to the IMF but failed to dispel market concerns Thursday over its solvency as it labours to reach a loan deal with its international creditors.

[ATHENS] Greece on Thursday made a scheduled 459 million euro (S$665.4 million) loan payment to the IMF but failed to dispel market concerns Thursday over its solvency as it labours to reach a loan deal with its international creditors.

Athens has until the end of the month to reach an agreement, with an April 24 meeting of eurozone finance ministers seen as the last chance for a deal.

Despite making the payment, Greek Finance Minister Yanis Varoufakis remained typically defiant.

"We are not going to sign on the bottom line of whatever you're giving us just to get the (money)," Mr Varoufakis said on a visit to Paris.

"We are not promising anything just to get the next loan tranche," he added.

From Moscow, where he is on a two-day official visit, Prime Minister Alexis Tsipras called for an "honourable compromise" to ensure continued access to the European Union-International Monetary Fund bailout cash.

"I am confident that despite the difficulties, all the forces will come to an honourable compromise," Mr Tsipras said.

Athens had earlier authorised the loan repayment to the IMF after days of uncertainty.

"Yes, I've got my money back," IMF head Christine Lagarde replied when asked at an Atlantic Council think tank event in Washington whether Athens had made the payment.

"What matters is now for the Greek authorities and the three institutions, the IMF, the ECB (European Central Bank) and the European Commission, to get on with the work," she said later on CNBC.

Tsipras' decision to go on a Russia charm offensive - while his government is locked in loan talks with its EU peers - has irritated Greece's European partners.

Athens is trying to persuade the EU and IMF to continue lending it money while easing austerity requirements in order to boost economic growth.

After talks with President Vladimir Putin on Wednesday, Mr Tsipras also met Russian Prime Minister Dmitry Medvedev on Thursday.

Speaking to students in Moscow, Tsipras said his priority remained to reach a deal with the EU.


"The goal of the government is for Greece to remain in the euro. To remain in the eurozone. We consider this problem facing us a common European problem and for this reason we seek a joint European solution," the 40-year-old PM said.

Experts from the IMF and the EU are scrutinising a list of economic reforms proposed by Athens in a bid to unlock another 7.2 billion euros in loans to stave off possible bankruptcy.

The Greek government has insisted it can meet its payments, but Tsipras himself fuelled market fears when he warned German Chancellor Angela Merkel in a letter last month that Athens would not be able to service its debt without more financial help from the EU.

Later this month, Athens has to make interest payments of nearly 400 million euros and roll over 2.4 billion euros in six- and three-month treasury bills due to mature on April 14 and 17.

Athens on Wednesday raised 1.14 billion euros in six-month treasury bills. On Thursday it announced the sale of another 625 million euros in three-month bills next week.

Greek banks are dependent on the ECB for financing, but the eurozone's central bank no longer accepts Greek sovereign bonds as collateral for loans.

The ECB on Thursday raised its emergency liquidity assistance to Greek banks by 1.2 billion euros to 73.2 billion euros.

Since 2010, Athens has received two successive loan packages from the EU and the IMF worth up to a total 240 billion euros in exchange for tough austerity measures and sweeping economic reforms.

Mr Putin and Mr Tsipras exchanged warm words on Wednesday and a vague "joint action plan" on cooperation was agreed upon, but Putin insisted Athens had not asked for financial aid.

Greece has been particularly hard-hit by the embargo slapped down last year in retaliation for sanctions imposed by the bloc against Moscow, as more than 40 per cent of its exports to Russia were farm products.

Although the embargo will remain, there was a sign of a potential compromise in the shape of a proposal to set up joint Russian-Greek companies based in Russia that would provide a loophole in the ban, according to a government source.

Under the mooted arrangement, Greek fruits and vegetables would not be considered as exports.

Also prominent on Wednesday's agenda was gas and energy cooperation, with Putin and Tsipras mentioning the possibility of Greek involvement in Moscow's new Turkish Stream pipeline project.

Mr Tsipras is expected to return to Russia for an economic forum in Saint-Petersburg on June 18-20.

In Brussels, eurozone experts were on the second day of a working meeting Thursday poring over the reform plans Greece submitted at the end of March.

The discussions were only making "small steps" a source said Wednesday.


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