Greece raids reserves to make IMF debt payment

Greece completed a 757 million-euro ($1 billion Cdn) debt payment to the International Monetary Fund on Tuesday despite a cash shortage in government coffers in Athens.

Greece's government has taken as "many steps as possible" toward reaching an agreement with bailout lenders, Prime Minister Alexis Tsipras said.

Meanwhile, its creditors are calling for tough reforms even as Greek finance minister Yanis Varoufakis warned his country was weeks from running out of cash.

Greece raided its reserves to make the payment and is believed to have borrowed $1 billion from its IMF holding account to meet the debt interest payment.

Member countries have two accounts with the IMF — one where they deposit their annual quota, in effect their membership fee, and another where they store reserves, including gold, for emergencies.

Deeper cash crunch to come

The cash crisis is expected to come to a head in the next few weeks, with more IMF repayments looming in June. The government has already ordered local authorities, universities and hospitals to put their reserves in the central bank to help ease the cash crunch.

The radical left Syriza-led government, elected in January, is locked in slow-moving bailout negotiations with international creditors and is seeking the release of stalled rescue loan money.

"It is now the turn of our (European) partners to take the steps needed," Tsipras told ministers during a five-hour cabinet meeting to discuss the debt negotiations.

Pressure from EU

Athens is under pressure to liberalize labour markets further and reduce high state funding for pensions — moves it has promised to resist.

"We must protect workers and pensioners, and protect working families whose (income) has been looted for the past five years by ineffective austerity measures under the bailout agreements," Tsipras said.

At a meeting in Brussels on Monday, Eurozone finance ministers said they were still expecting more detailed proposals from Athens. German Finance Minister Wolfgang Schaeuble argued that the atmosphere had improved in negotiations but little had changed in substance.