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| Greece to Put Off Friday Debt Payment to I.M.F. | Greece to Put Off Friday Debt Payment to I.M.F. |
| (35 minutes later) | |
| ATHENS — Greece told the International Monetary Fund on Thursday that it would not make a debt payment due this week, taking a little-used option to defer that payment and three others until the end of the month. | |
| The move buys time for Greece, which is running out of money as it tries to negotiate a new debt deal with the I.M.F. and its European creditors. But given the tensions in those negotiations, Greece’s decision to withhold the payment, due Friday, carries political and financial-market implications that are hard to predict. | |
| Although the practice of bundling I.M.F. loan payments into a single sum during a calendar month is allowed under the fund’s rules, the last time that option was taken was by Zambia in the 1970s. | Although the practice of bundling I.M.F. loan payments into a single sum during a calendar month is allowed under the fund’s rules, the last time that option was taken was by Zambia in the 1970s. |
| “The decision was intended to address the administrative difficulty of making multiple payments in a short period,″ the I.M.F. said in a news release announcing the decision. Athens had no immediate comment. | |
| Simon Tilford, deputy director of the Center for European Reform in London, said the move reflected high-stakes brinkmanship by Athens. “What they’re saying to the creditors is, you’re going to have to blink, we’re not prepared to sign up to more of the same austerity and a continuation of what we’ve been going through for the last year,” he said. | |
| So far, Mr. Tilford added, the creditors had offered minimal concessions that most likely would not pass muster with the far left of Prime Minister Alexis Tsipras’s Syriza party. Greece is likely to accept only a deal that ends austerity and eliminates conditions that sharply reduce demand within the already moribund economy. A deal would also have to sharply reduce the requirement under the bailout for a primary surplus — the amount of cash in Greece’s coffers after expenses and debt payments. Mr. Tsipras has pushed for more of that money to be used to stimulate the economy. | |
| Whether Greece would make the I.M.F. payment due this week — 300 million euros, or $335 million — had been a guessing game of late. Christine Lagarde, the managing director of the I.M.F., said earlier Thursday at a Washington news conference that she was confident that Greece would make the payment. | |
| But as tough talks with the country’s creditors stumble and crawl, Greek officials had suggested all week that the answer would depend on the prospects for an imminent deal to renegotiate the terms of its international bailout program. | |
| Asked about the payment late Wednesday in Brussels, Mr. Tsipras said, “Don’t worry about it,” prompting speculation that Athens would meet the Friday deadline. | |
| The comment was in reply to a reporter’s question as he left a five-hour dinner meeting with Jean-Claude Juncker, the president of the European Commission, and Jeroen Dijsselbloem, president of the Eurogroup of finance ministers. They had discussed proposals to unlock €7.2 billion from Greece’s international bailout program. The parties reached no deal, but agreed that meetings and working groups would continue. | |
| Meanwhile, Greek government officials keep playing it tough for the restive political crowd in Athens. It has become clear that whatever deal Mr. Tsipras and the creditors might hammer out, he could have a tough sell with his own leftist Syriza party. | |
| After Wednesday night’s meeting, all sides pointed to progress in the discussions. But differences remain. Mr. Tsipras, at a news conference afterward, ruled out more pension cuts, noting that five years of austerity had led Greece to a “major catastrophe,” and that its economy had shrunk by a quarter. | |
| “The proposal of the Greek government is the only realistic one on the table,” he said. | |
| Hard-liners in the Syriza party have suggested in recent days that they may dissent if Mr. Tsipras strikes a deal that they consider a violation of the anti-austerity pledges that brought the party to power in January. The junior coalition partner, the right-wing Independent Greeks, has also said it would not back further austerity. | |
| Details of Greece’s proposal that were leaked to the news media indicate some concessions, allowing for tax increases but lacking the bold overhauls to the Greek pension system and the labor sector that the country’s lenders had been seeking. | |
| By contrast, the plan put forward separately by its creditors is said to include calls for further cuts to spending on pensions, tax increases and other painful measures. The creditor plan, though, would apparently agree to lower annual targets for primary surpluses — the amount of revenue Greece is required to hold in its coffers after expenses have been paid and before servicing its debt. A lower primary surplus would free up more money for Athens to spend on stimulating the economy. |