Greece Will Make Next Debt Payment, Varoufakis Says

By JAMES KANTERMAY 7, 2015

The New York Times

BRUSSELS — Greece’s finance minister said on Thursday that the country would make its next major loan repayment to the International Monetary Fund on time, but there were few signs of an immediate breakthrough in a long-running stalemate between the government in Athens and its international creditors.

By making the payment of about 750 million euros (about $845 million) by Tuesday, Greece would tamp down speculation that the country will soon default on its huge debts and destabilize the eurozone economy. But the payment represents just one of several serious financial challenges facing Greece, which include government payrolls and a series of far bigger loan repayments.

“We intend to pay every creditor,” the official, Yanis Varoufakis told a lunch meeting at the European Business Summit in Brussels. “We certainly intend to pay the I.M.F., and we will pay.”

Mr. Varoufakis has appeared increasingly embattled after sharp criticism from eurozone finance ministers weary of his confrontational style, and after the Greek prime minister, Alexis Tsipras, downgraded his prominence in negotiations with international lenders.

But Mr. Varoufakis is still expected to represent Greece at a meeting of finance ministers from eurozone countries on Monday evening in Brussels.

There had been expectations of a breakthrough by May allowing the Greek authorities to unlock €7.2 billion in funds from its bailout program. But Athens must agree to overhauls to the country’s economy that are far-reaching enough to satisfy Greece’s international creditors to gain access to that money.

“Negotiators for Greece and its creditors are converging on substance, but they won’t reach a deal in time for the 11 May Eurogroup meeting,” Mujtaba Rahman, who heads the Europe practice for the Eurasia Group, a political-risk consultant firm, wrote in a briefing on Thursday, referring to the grouping of the eurozone’s finance ministers.

Even so, wrote Mr. Rahman, the meeting on Monday in Brussels “could potentially pave the way for Greece to receive some short-term financial relief.” That could involve steps by the European Central Bank to ease limits on its flow of credit to Greek banks, he wrote.

At the lunch talk, Mr. Varoufakis said a deal was possible “in the next few days, or weeks.” Later Thursday during a panel discussion, Mr. Varoufakis said that all sides were “getting much, much closer” to a deal.

Just when the pivotal financial moment comes for Greece remains an open question. Last month, in a sign of the tight state of the country’s finances, the Greek government issued a decree obliging public sector entities to deposit cash and funds to the country’s central bank. But analysts say that policy is unlikely to cover the next big bond redemption, due in July.

As Greece continues to run perilously low on cash, Mr. Tsipras spoke with President Vladimir V. Putin of Russia by telephone on Thursday about a potential alliance in the energy sector that could raise billions of euros.

Mr. Tsipras’s office said the Greek leader confirmed the country’s readiness to participate in the construction of a Greek pipeline to transfer Russian natural gas to the European Union from Greece’s border with Turkey.

According to Mr. Tsipras’s office, Mr. Putin “expressed his intention to support a plan to finance the Greek company that will construct the pipeline, which could draw energy and growth investments, and the cost of which could be covered by the company’s profits from operating” the pipeline.

Niki Kitsantonis contributed reporting from Athens.