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Senior officials in Greece have tried to informally request a delay of the loan payments from the International Monetary Fund (IMF) but received a negative response, as reported by the Financial Times newspaper, stating further that this move shows the poor state of Greek finances.

According to sources having information from both sides, Athens was persuaded not to request a delay of its payments to the IMF, namely of two instalments to the amount of almost 1 billion euro that are due in May. As stated by the Financial Times, although the talks held in early April were private, the refusal to the request shows that the Greek government is experiencing increasing difficulties in meeting its external obligations, but also its domestic ones such as the payment of salaries and pensions.

It is able to pay

The newspaper reports that the representatives of the creditors in Greece are confident that Athens is able to make the payments next month. But even if that happens, the issue will appear again in June when the significant payments on the bonds held by the European Central Bank are due.

Senior IMF officials have repeatedly stated that rescheduling of repayments can only be accepted if it is part of a new round of general negotiations, and therefore of a new bailout programme. Currently if Greece fails to make a due payment, it will join the group of countries including Zimbabwe and Zaire.

It seems that Greece is the first developed country that, after 1980, has made such a request, albeit informally. The position of Washington is firm and its reply is that the delay of one instalment cannot solve any problem.

To pay salaries and pensions

The article in the Financial Times points out that a source who received information on the attempt of the Greek side said that the proposal of Athens would allow Alexis Tsipras to pay salaries and pensions while the negotiations with the creditors continue and no financial aid is granted to Greece.

The euro zone creditors have refused to allocate funds to Athens unless the Greek government submits a more complete list of economic reforms and a credible plan for their implementation. However, a lot of time has already been lost, and even if the negotiations go well, the representatives of the European Union are not sure whether the technical work that needs to be done will be complete by 11 May (when the Eurogroup meeting will take place), the day before the payment to the IMF is due.

Senior euro zone officials are still concerned that Athens is seeking a political agreement at ministerial level in order for the institutions not to be further involved.

The article in the Financial Times ends as follows, "The Greek government will struggle to meet the bill for pensions and public sector salaries at the end of the month and almost certainly will not have enough cash to make both the IMF and domestic payments in May."