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Greece makes payment but still no deal

Wednesday, May 06, 2015 - 02:15

Greece has made a 200-million-euro interest payment to the IMF on time. But as David Pollard reports, it's the payment next week which will be the real challenge.

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It was a milestone of sorts - Greece has paid a 200 million euro interest payment to the International Monetary Fund. But that payment was never going to be the problem - next week's 750 million euros could be the deal breaker. Not that there is a deal! Athens is still trying to persuade euro zone partners and the IMF to extend further aid in return for reforms. It's making some progress - agreeing to speed up two privatisation deals - one for Piraeus port and another for its regional airports. But pension and wage reforms remain elusive, despite the Finance Minster's confidence after a meeting in Italy. (SOUNDBITE) (English) GREEK FINANCE MINISTER, YANIS VAROUFAKIS, SAYING: "The best way in which the Eurogroup of next Monday the 11th can be turned into a platform for the kind of agreement between Greece and our partners, which is not only going to resolve the current negotiation but also lead to a period after June that will allow the Greek economy to recover and to grow again." Most Greeks still favour staying in the euro. But many don't want their government to give in yet. (SOUNDBITE) (Greek) MERCHANT, GIORGOS CHRISTIOPOULOS, AGED 58, SAYING: "The negotiations should continue, but with better terms for us. It's better we stick to our guns rather than give in." (SOUNDBITE) (Greek) PENSIONER, SAKIS SOFIANIDIS, SAYING: "We should make concessions, but up to a point. Cutting pensions and wages will mean a new recession, more layoffs and a further hit to the economy." Markets still expect a deal, however late in the day it comes, says Joe Rundle from ETX Capital. (SOUNDBITE) (English) ETX CAPITAL'S HEAD OF TRADING, JOE RUNDLE, SAYING: "I think it will be messy and I think the markets have under-estimated the contagion risk in there. I think ultimately if it does come to it, Germany will have to step in and save Greece and bail them out but I don't think it will come to that." The European Central Bank may help avert a funding crunch by allowing Greek banks to borrow more emergency cash. But its hands are otherwise tied, says Justin Urquhart-Stewart from Seven Investment Management. (SOUNDBITE) (English) JUSTIN URQUHART STEWART, SEVEN INVESTMENT MANAGEMENT, SAYING: "What the ECB is trying to do here is give them a little bit more time to be able to reach a sensible compromise, but at the same time what it is also doing is saying actually we are not going to be giving way any further." That seems to the crux of the matter - no-one's yet prepared to give way.

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Greece makes payment but still no deal

Wednesday, May 06, 2015 - 02:15