Reports about a meeting between Greek Finance Minister Yanis Varoufakis and Managing Director of the International Monetary Fund (IMF) Christine Lagarde hit the newswires over a quiet Easter weekend. The effort is seen as a last ditch attempt by Greece to prevent its imminent default.
While some sources claimed last week that the country was going to fail to meet its obligations to repay the International Monetary Fund a tranche of €450 million on April 5, a Greek government spokesperson denied these claims, explaining that it did not intend to fail to meet its obligations to the IMF.
As the country hasn’t received any official support from its creditors for the past seven months it is in desperate need of new funding sources, as the country’s economy is in shambles following the election of its extreme leftist-led coalition government.
ForexTB Set to Launch New Innovative Trading PlatformGo to article >>
Mr. Varoufakis will clarify the country’s position and aim to secure additional bailout funds as the confidence of the country’s Euro Zone partners in the reform commitments made in February wanes.
In order to secure its next aid tranche, the country’s parliament has to ratify a number of unpopular measures, including pension and labor reforms. Instead of committing to those, Varoufakis has put on the table a number of questionable increases in tax collection rates amid doubtful growth forecasts for the next couple of years.
Even if the finance minister commits to the reforms necessary in order to meet the criteria set by Greece’s creditors, the government will have a very hard time passing the reforms in parliament as an agreement on labor and pension reforms will effectively substitute the vote of the Greek electorate.