German official: No reason to believe Greece will default after IMF payment deadline
Although Greece's Interior Minister Nikos Voutsis said on Sunday that Greece cannot make a repayment to the International Monetary Fund (IMF) due on 5 June as it does not have the money, senior German official said there was no reason to believe Greece would be in default after the payment to the IMF falls due on June 5.
Greece must repay four loans totaling 1.6 billion euros ($1.76 billion) to the IMF next month, starting with a 300 million euro payment on June 5.
Athens is likely to default on the IMF loan repayment if no agreement is reached within EU/IMF for new loans to be disbursed to Greece. This would start a process that could lead Greece out of the euro zone.
However, a senior German official, speaking on condition of confidentiality, said it was inspiring that Greece had signaled its desire to meet the looming debt obligations.
"I think there is reason to believe that we will not be talking about a default situation around June 5, neither before or immediately thereafter."
Negotiations between
Greece and its creditors on more funding have been going on with difficulties since
late January, when the anti-austerity government of Alexis Tsipras took power
on promises of reversing some reforms agreed with
the creditors by the previous government.
Despite
some progress on a number of issues, an agreement cannot yet be achieved because the
creditors believe that to repay its huge public debt, Greece should be
running a higher primary surplus, or the balance before debt servicing
costs, than Athens is prepared to accept, says Reuters.
