How’s that for timing?
Greece has made a €2bn loan repayment to its European creditors today, in a sign that the country remains a “reliable” partner in its ongoing bailout talks, according to its EU partners.
The successful repayment comes amid fears the country could face a fresh liquidity crisis this summer when the government is due to repay a €7bn debt bill – an obligation it is not expected to meet without a fresh injection of bailout cash (see chart above).
Eurozone finance ministers are meeting in Brussels for their latest meeting on the country’s bailout progress today, but are not expected to sign off on Athens long-awaited second bailout review that would unlock around €6bn of creditor cash for the economy.
Divisions between the EU and the International Monetary Fund over the level of debt restructuring and budgetary targets built into the €86bn bailout mean hopes for an agreement have been pushed back at least a month, with investors eyeing March or April’s Eurogroup as the next realistic deadline for an agreement.
Today’s €2bn repayment to the European Stability Mechanism was part of funds used to recapitalise the Greek banking system in 2015.
“The prompt payment shows Greece is a reliable contract partner”, said Klaus Regling, managing director of the ESM, which is Greece’s single largest creditor.
“It is a sign that the restructuring of the Greek banking sector is progressing well”.
Today’s Eurogroup meeting will kick off at 15.00 (GMT). A Greek two-year bond, which has become a barometer of market nerves about the country’s bailout talks, is back under pressure today, with its yield climbing 5 basis points to 9.7 per cent (read more here).
Get alerts on Greece debt crisis when a new story is published