By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-Greece on Thursday notified the International Monetary Fund (IMF) it plans to bundle its loan repayments due the end of June into one payment.
The country is to make $1.7 billion payment at the end of the month and are continuing fresh talks for bailout financing, the IMF and Greek officials indicated showing a sign that the country is confident of reaching a deal soon on fresh bailout financing.
“The Greek authorities have informed the Fund today that they plan to bundle the country’s four June payments into one, which is now due on June 30,” Gerry Rice, IMF spokesman said.
“Under an Executive Board decision adopted in the late 1970s, country members can ask to bundle together multiple principal payments falling due in a calendar month (payments of interest cannot be included in the bundle). The decision was intended to address the administrative difficulty of making multiple payments in a short period, “the global lender added.
It has mounted pressure on Greece to apply the option of bundling its payments and wiring the money at the end of June, a move that temporarily relieves some of the intense pressure on Greece’s treasury, according to Greek officials.
The country has four (4) loan repayments to the IMF due this month, on June 5, 12, 16 and 19 respectively.
Until Thursday, Greece has disclosed it’s considering using the bundling option, out of concern that the move would convey that the country had no money to meet the regular payment schedule.
However, the countries authorities had indicated that bundling the IMF payments be considered if the country were close to reaching a deal with its international creditors to unlock bailout funding. It has been waiting for months for a €7.2 billion ($8.05 billion) payment from its €245 billion international bailout program.
The country and main lenders—other eurozone governments and the IMF met to deliberate its budget targets for the future; but in some cases not agreeing on some of the measures for meeting up with these targets.
According to its main lenders, Greece should impose pension cuts and heavier sales taxes, measures authorities of the country disagree with.
Angela Merkel, German Chancellor said on Thursday that much work remains before an agreement is reached. “The talks are ongoing, possibly with high intensity, but they are still far from having arrived at a conclusion,” she added.
The bundling measure will give Greece ample time to negotiate an agreement with its lenders.
