Greece running out of time to agree aid deal to pay off debts

Greece’s Deputy Foreign Minister Nikos Chountis: 'We haven’t got the money. We won’t pay. It’s that simple.'

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Greece intends to make good on its debt obligations but needs aid urgently to be able to do so, the government said yesterday after several senior officials insisted Athens had no money to pay a loan instalment falling due next week.

Shut out of bond markets and with bail-out aid locked, Greece is running out of cash to pay its bills. It must repay four loans totalling €1.6bn (£1.1bn) to the International Monetary Fund next month, starting with a €300m payment on 5 June which is seen as the next crunch point for state coffers.

Athens has the money to make monthly wage and pension payments this week, a government spokesman, Gabriel Sakellaridis, told a news conference yesterday. But he was less direct when asked about the 5 June payment, reiterating the government’s official stance that it has the responsibility to pay all its obligations.

“Based on the liquidity problems that we have, there is an imperative need for us and the eurozone to have a deal as soon as possible,” Mr Sakellaridis said.


A growing list of senior members of the government – the interior minister among them – have openly said Athens does not have the means to pay the IMF, and would prioritise paying civil servants and pensioners instead.

“We haven’t got the money. We won’t pay. It’s that simple,” the Deputy Foreign Minister Nikos Chountis told Greek TV yesterday.

Greek officials have frequently threatened to default in recent weeks, arguing the country does not have cash, which eurozone officials have dismissed as a negotiating tactic to raise pressure on creditors to disburse aid.

The ruling Syriza party’s central committee also voted on Sunday to reject proposals by the far left that Greece miss the next IMF payment, as well as calls to hold a referendum that would give voters the right to reject any deal with creditors that demands more cuts.

The government spokesman voiced optimism yesterday about a deal by early June but acknowledged that agreement on VAT hikes, pension and labour reform and lower primary surplus targets had yet to be found in negotiations with EU and IMF lenders.

Not accepting cuts to wages and pensions has been one of the Greek government’s so-called red lines in four months of negotiations since taking power in January. Such cuts are a sensitive issue in a country where unemployment has soared and incomes have fallen during the economic crisis.