Greek FinMin sees problems in repaying IMF and ECB

varouf3Greece admitted on Wednesday it will struggle to make debt repayments to the IMF and the European Central Bank this year as Germany’s finance minister voiced open doubts about Athens’s trustworthiness.

A day after eurozone finance ministers agreed to a four-month extension of a financial rescue for the currency bloc’s most heavily indebted member, Finance Minister Yanis Varoufakis gave a frank assessment of Greece’s financial position.

“We will not have liquidity problems for the public sector.

But we will definitely have problems in making debt payments to the IMF now and to the ECB in July,” he told Alpha Radio.

He put no figure on the funding gap. After interest payments this month of about 2 billion euros, Athens must repay an IMF loan of around 1.6 billion that matures in March and about 7.5 billion euros for maturing bonds held by the ECB in July and August.

In another indicator of the strain on the Greek economy, two of the country’s four main lenders, Eurobank and Bank of Piraeus, will be dropped from the pan-European STOXX 600 benchmark index, potentially depriving them of vital investment at a rocky time.

Despite a rebound since the bailout extension was agreed, shares in the two banks have fallen about 65 percent since last February, hurt by a wave of deposit withdrawals and worries over the solvency of the Greek state.

Reuters

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