A Greek national flag flutters atop the parliament building in Athens on May 5, 2015.Alkis Konstantinidis/Reuters
With Greece's cash flow problems growing by the day and negotiations with its creditors on the ropes, Athens managed to make a $222-million (U.S.) repayment to the International Monetary Fund on Wednesday.
But another, much larger repayment looms next week that Greece will struggle to manage. The country once more faces the possibility of having to default on its debt, which could set off a chain of events jeopardizing its membership in Europe's joint currency.
The country's left-wing government has been locked in troubled negotiations with its creditors and the institutions overseeing its bailout – the IMF, European Central Bank and European Commission – for the past three months.
Finance Minister Yanis Varoufakis was in Rome to discuss the issue with his Italian counterpart Pier Carlo Padoan, while he heads to Madrid on Friday to meet Spanish Finance Minister Luis de Guindos.
Both sides hope to make progress by May 11, when eurozone finance ministers are to meet. But expectations that a deal will be reached by then have faded.
On Tuesday, a government official in Athens attributed the latest snag in negotiations to disagreements between the IMF and European Commission on how to handle the Greek crisis.
The country is desperate for the creditors to unlock the final 7.2 billion euro instalment from its 240 billion euro bailout. Locked out of the international bond market due to high interest rates that reflect investor fears of a default, the bailout funds are the only significant source of financing Greece has.
The final instalment has been pending since last summer, and Athens is now running out of options for funds needed both to repay its international loans and to ensure pensions and salaries are paid.
It has already ordered state enterprises, including municipalities and schools, to transfer their reserves into a Bank of Greece account where they can be used as a loan by the state.
Wednesday's repayment of interest on IMF's loans was made without any problems. "The payment is proceeding normally," a finance ministry official said, on condition of anonymity in line with government regulations.
But on May 12, Greece must repay €750-million to the IMF – and it is not clear whether it will be able to meet both that payment and pay some pensions and salaries due mid-month.