Greece Pays the IMF a Day Early

Overnight, it was announced in Reuters, that Greece would pay the International Monetary Fund (IMF) €750 million or $836 million a day early. This surprise is averting fears of a possible Greek default that was causing angst in the financial markets.

According to senior officials in the Greek finance ministry “the order to pay the IMF has been executed.”

Athens is running out of cash and there has been a lot of doubt circulating if they could even pay the IMF. It was thought they would use the money to pay salaries and pensions due later this month. The newly established Greek government has insisted they would meet all debt obligations but doubted they had the money to make the payment.

Even though thy made this payment their financial situation remains quite bleak. They need more cash from lenders. Ministers from Greece were pressing EU finance ministers in Brussels on Monday to make progress on reforms for cash from lenders. They need to pave the way to receive some cash to ease their tremendous cash crunch. Yanis Varoufakis, Finance Minister of Greece, is hopeful a deal can be reached this week. He says deadlines are necessary but “inflexible” but there are “red lines” that cannot be crossed.

The Eurozone is playing down any possibility that the European Central Bank (ECB) is planning to raise the limit on short-term treasury bills that the banks in cash strapped Greece can purchase. This would help Greece avoid a bankruptcy on the national scale. In response to this, Varoufakis said his countrymen need jobs. To “do their jobs” they need money to be paid with.

The Greek finance ministry added Greece has stick to its election promises. They have rolled back painful austerity measures that the IMF and other lenders demanded from Greece to receive bailout monies.