Cash-strapped Greece vows to honour repayment

Yanis Varoufakis has spoken with IMF's Christine Lagarde. Picture: AFP/Getty

Finance minister Yanis Varoufakis and IMF managing director Christine Lagarde met in Washington DC for an “informal discussion” on the debt-stricken nation’s reform programme.

Greece is in difficult negotiations with creditors over its bailout programme, which has delayed the disbursement of the final €7.2 billion (£5.3bn) aid tranche. That has led to a cash crunch, forcing the government to tap reserves.

Athens has been hoping for at least a partial release of the final bailout instalment in order to avoid defaulting, and to pay salaries and pensions.

“We both agreed that effective co-operation is in everyone’s interest,” Lagarde said. “We noted that continuing uncertainty is not in Greece’s interest.”

Greece must repay a €450 million IMF loan instalment on Thursday.

Deputy finance minister Dimitris Mardas stressed at the weekend that Greece has the funds, but it is up to the government to decide whether to pay.

Greece and its creditors have been negotiating which reforms it should enact to its economy to receive more funding.

Lagarde said discussions will resume “promptly” between technical teams and authorities in Athens and in Brussels.

Since 2010, Greece has been dependent on rescue loans worth some €240bn from other eurozone countries as well as the IMF.

Prime minister Alexis Tsipras was elected in January on promises to abolish the deeply resented bailout conditions, which included deep spending cuts and tax hikes.

However, the new Syriza government has since softened many pre-election promises.