Greece orders IMF payment as eurogroup meets

Greece's finance ministry ordered a €750m payment to the International Monetary Fund, ending days of uncertainty over whether Athens would use the instalment as a bargaining chip in ongoing talks with its creditors.

Ministry officials said they had sent a payment order to the government's national accounts office to ensure it would arrive in the IMF's coffers by Tuesday, when the loan repayment falls due.

"The order to pay has been made," said one finance ministry official.

Some members of the governing hard-left Syriza party had pushed ministers to withhold the payment until eurozone finance ministers meeting in Brussels agreed to endorse progress made by bailout negotiators in recent days.

Athens has lobbied furiously for such a statement, which officials believe would allow the European Central Bank to lift the ceiling on its issuance of short-term debt, which would provide more breathing room for the cash-strapped government.

But according to officials involved in the Brussels meeting, Yanis Varoufakis, the Greek finance minister, confirmed Athens would make the payment during the hour-long session.

Ministers had only a perfunctory debate over the Greek programme, and were due to issue a statement far more lukewarm than Athens had hoped - welcoming the improved atmosphere in the talks but warning there were still significant differences to be closed.

Such language is not expected to give the ECB the leeway it would need to lift its restrictions on Athens' ability to sell treasury bills, which are almost exclusively purchased by Greek banks.

Doubts over the Greek IMF payment were fuelled by warnings emanating from Athens on Sunday night, where several Greek officials said the government planned to withhold the money if eurozone finance ministers were unable to deliver a positive statement on talks aimed at unlocking €7.2bn of aid for Athens frozen since last year.

"We're talking here about a political move [by Greece]," one Greek official said of the possible withholding of the payment. "The agreement with our creditors has to be made at the political level."

The uncertainty underscored the heightened political stakes for Alexis Tsipras, the Greek prime minister, who is being pushed by creditors to bend on so-called "red lines" in bailout negotiations while keeping his own Syriza party on board.

According to officials briefed on the talks, differences between Athens and its bailout monitors remain on nearly every major issue. The government is particularly digging in its heels over state pensions and collective bargaining rights.

"The red lines, by necessity, are inflexible," Mr Varoufakis said upon his arrival at the eurogroup meeting in Brussels. "But our red lines and their red lines are such that there is common ground."

Officials from Greece's bailout monitors have long said they believed Athens had sufficient funds to make Tuesday's payment. Any non-payment, these officials believe, would be a political decision and not because the country had run out of funds.

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Peter Kazimir, the Slovak finance minister, who has emerged as a leader of the eurogroup's hardline camp, said that while the atmosphere in the negotiations has improved of late there was still "no content quality improvement on radar."

As the Greek government's coffers have emptied in recent weeks, it has ordered hundreds of state entities - among them hospitals, universities and local authorities - to deposit their cash reserves with the central bank. But many such entities, including an overwhelming majority of municipalities, have declined to comply.

"The government is scraping the bottom of the barrel to ensure it can pay wages and pensions at the end of the month. Paying the IMF while not making good on wages and pensions would be political suicide for Syriza," said Mujtaba Rahman, head of European analysis at the Eurasia Group, a risk consultancy.

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