Greece can scrape together enough cash to meet its payment obligations into June, eurozone and Greek officials said yesterday, playing down fears of an imminent default as hopes receded of a deal with its creditors to release fresh aid.

The European Central Bank raised its ceiling on emergency lending by the Greek central bank to Greek banks by €1.5 billion to €75.4 billion , giving them a bigger buffer to cope with deposit withdrawals, a banking source said.

Greece has received two international bailouts worth €240 billion since 2010 but its economy has shrunk by some 25 per cent, unemployment has soared and a leftist-led government elected in January has refused to complete a reform programme that includes measures it says worsen the economic slump.

The head of the Eurogroup Working Group, which prepares decisions for euro zone finance ministers, said Athens would not present a new list of economic reforms required to unlock further EU funds when the ministers meet in Latvia tomorrow, but Greece should be able to stay solvent till June.

“The liquidity situation in Greece is already a little tight, but it should be sufficient into June,” EWG chairman Thomas Wieser told Austrian broadcaster ORF.

Greek Deputy Finance Minister Dimitris Mardas said the government aimed to have a €2.5 billion cash buffer by forcing state entities to lend to the state in order to cover payments until the end of May.

Shut out of bond markets and running out of money to pay civil servants, pensioners and suppliers and service its debt, the government issued a decree on Monday ordering public bodies to transfer their spare cash to the central bank.

Progress in talks with Athens on reforms is painfully slow

“I want this €2.5 billion to cover any needs that may occur, I repeat, taking into account the worst case scenarios and the needs for May,” Mardas told Star TV, adding he was confident that Greece and its lenders would reach a deal.

Mardas said initially the state was still short 350-400 million euros to cover wage, pension and other needs in April but later said the problem had been solved because a pension fund had come forward to lend it the money.

He dismissed a report that Athens was considering a parallel currency or IOUs to make payments, saying he was confident a deal would be struck with creditors to avoid a default.

Greece has to make two repayments to the IMF totalling about €950 million by May 12. It has another €1.45 billion payment due to the IMF in June, but the biggest looming payments are bond redemptions to the ECB of €4.18 billion in July and €3.38 billion in August. In order to receive some €7.2 billion left in its bailout, Athens must complete an agreed reform programme to the satisfaction of EU, IMF and ECB experts.

Euro zone officials said progress in talks with Athens on reforms was painfully slow and EU experts were still being denied access to detailed information including public accounts data. But they said things were moving in the right direction.

“It is my central belief that the negotiations with Greece can still be successfully completed,” Wieser said.

“The clock is ticking. There won’t be a new list in Riga, but over the course of May it must finally be reached.”

Euro zone officials had originally expected the reform list to be presented in time for tomorrow’s ministerial session, but such hopes have evaporated.

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