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Greek PM warned lenders of not repaying IMF debt in May: report

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[ATHENS] Greece's Prime Minister Alexis Tsipras had at one stage warned foreign creditors that Athens would not repay 750 million euros due to the IMF in May unless they provided it with immediate liquidity, the Kathimerini newspaper reported on Saturday.

Athens ultimately made the May 12 payment by emptying an International Monetary Fund holding account.

Citing European sources, the newspaper said Tsipras made the threat in a May 8 letter to EU Commission President Jean-Claude Juncker, IMF head Christine Lagarde and ECB President Mario Draghi.

The Greek government did not immediately respond to a request for comment.

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In his letter, Mr Tsipras said Greece was starved of domestic sources of liquidity as it has been meeting its domestic and foreign debt obligations despite not having received any aid under its 240 billion euro bailout since last August, the newspaper said.

To restore liquidity, Mr Tsipras proposed the ECB raise Greece's treasury bill issuance ceiling; a partial disbursement of loan tranches worth 7.3 billion euros; the return of 1.9 billion euros in profits the ECB made by buying Greek bonds since 2010; and the return of 1.2 billion euros in the euro zone's bailout fund, the EFSF.

The letter was viewed as "possible bluff" and reinforced a climate of mistrust between the two sides, the newspaper said.

Greece's cash reserves are dwindling and negotiations between Mr Tsipras's new left-led government and its lenders over a cash-for-reforms deal have been fraught with delays for months.

On Friday, Mr Tsipras said the two sides had found some common ground, but the government would not back down from its red lines such as no cuts to wages and pensions.