Debt deal vital, says Greece’s interior minister

Greece will be unable to meet its repayments to the International Monetary Fund next month unless it reaches a deal with creditors, Greece’s interior minister said yesterday, as negotiations between Greek officials and representatives of its official lenders continued over the weekend.

"The four instalments for the IMF in June are €1.6 billion. This money will not be given, and is not there to be given," Nikos Voutsis said. Regarded as one of the more hard-left members of Alexis Tsipras's Syriza party, Mr Voutsis was speaking in an interview with Greek television.

Despite making a €750 million repayment to the IMF earlier this month, Greece faces further repayment deadlines to the Washington-based fund next month, including a payment of approximately €300 million due on June 5th.

Discussions between Greek officials and representatives of the European Commission, the IMF and the European Central Bank continued over the weekend in Brussels, with meetings on Saturday due to recommence early this week.

Local funding

With negotiations still focusing on the areas of reform of labour markets and the pension system in Greece, there were no signals of an immediate breakthrough. A four-month impasse has seen the Greek government order the transfer of cash reserves from local municipalities to the central bank to help meet exchequer payments.

Speaking to the BBC yesterday, Greek finance minister Yanis Varoufakis said that Greece had made enormous efforts to meet its end of the deal with lenders and it was now up to the three creditor institutions to compromise.

"Greece has made enormous strides at reaching a deal, " Mr Varoufakis told Andrew Marr. "It is now up to institutions to do their bit. We have met them three-quarters of the way, they need to meet us one-quarter of the way."

Mr Varoufakis, who was last month dropped from direct negotiations with international lenders on a new reform package by Mr Tsipras but who remains finance minister, said a Greek exit from the euro zone would be a disaster for the euro area.

“It would be a disaster for everyone involved. It would be a disaster primarily for the Greek social economy, but it would also be the beginning of the end of the common currency project in Europe,” the finance minister said. “Once you infuse into people’s minds, into investors’ minds, the idea that the euro is not indivisible, it will be only a matter of time before the whole thing begins to unravel.”

Reform plan

Four months since left-wing party Syriza swept to power in the Greek elections, the new government has failed to strike a deal with the IMF and EU lenders on a new reform plan.

Though the next eurogroup meeting of finance ministers is not scheduled until June 18th euro zone finance ministers could reconvene before then to sign off on a deal.

Mr Tsipras held a two-hour meeting with German chancellor Angela Merkel and French president François Hollande at the Eastern Partnership Summit in Riga late on Thursday night, though little progress was made on a deal.