Greek Economy Minister: “Default to IMF is out of question” but “we cannot pay €7.6bn to ECB

Greece’s Economy Minister Giorgos Stathakis has warned that Greece did not have the resources to repay two loans to the European Central Bank loans, amounting to some €7.6 billion, which fall due next July and August. However he underlined that a Greek default on loans to International Monetary Fund was out of question. On May 12th Greece has to pay €750 million  to the IMF  in a time when the country scrambles to get together funds to pay wages and pensions and the IMF loan through “internal borrowing from public institutions and municipalities. Since August 2014 Greece has been covering internal needs and payments to its creditors by on resources.

Economy Minister George Stathakis has told RTÉ News that a potentially damaging debt default by Greece was “out of the question.”

He said that Greece defaulting on an International Monetary Fund loan, due for repayment on 12 May, would trigger “enormous instability” in the country, with “very, very negative effects.”

However, Mr Stathakis also declared that Greece did not have the resources to repay two European Central Bank loans, amounting to some €7.6 billion, which fall due in July and August.

With Greek bond yields continuing to rise, and the country scrambling to gather funds from public utilities to pay salaries and pensions, there has been mounting speculation that Greece could default on the €750 million IMF loan which falls due next month.

He said the last bailout money Greece received was in July of last year and that 93% of the rescue funds Greece receives were going to repay debts.

Greece had its own resources which it was using to meet recent debt repayments, he said, but those resources were limited, he said.

“As you know, July and August have a huge repayment of €6bn to €7bn [to the ECB] which is obviously beyond our own resources,” he said.

Mr Stathakis, however, said a Greek default in the short term was “out of the question.”

“There would be enormous instability in the Greek economy, all the positive factors will be diminished… there will be very, very negative effects. (full interview in RTE.ie)