Greece denied a German newspaper report it may opt out of receiving more bailout money

Greece on Tuesday denied a German newspaper report it could refuse receipt of bailout loans needed to make a July debt repayment if its lenders fail to offer clear debt relief terms, despite it having passed more reforms.

Tuesday’s report in mass-selling Bild that Athens could go without new loans of about 7 billion euros ($7.80 billion) if it does not get comprehensive debt relief, and it was itself putting billions of euros aside preparing for this scenario, rattled the euro in early trade.

Greek Finance Minister Euclid Tsakalotos dismissed the report saying it distorted what he said during a news briefing a day earlier.

“Bild has distorted what I said yesterday,” he told Reuters when asked to comment on the report.

“What I did say is that the disbursement (of bailout money) was not an issue, because all sides agreed that we have kept to our commitments,” he said. “But the Greek government feels that a disbursement without clarity on debt is not enough to turn the Greek economy around.”

The country has about 7 billion euros of debt maturing in July, a sum it will not be able to repay unless it gets new loans out of its current bailout worth up to 86 billion euros, the third aid programme since the crisis began.

Euro zone finance ministers failed to agree with the International Monetary Fund last week on debt relief terms for Greece. They did not release new loans to Athens but recognised it had made significant progress with reforms.

Greece hopes that euro zone finance ministers will offer enough clarity in June on the debt relief measures that could be carried out after its bailout ends in 2018, to show investors that its debt – now at 197 percent of GDP – will be sustainable and help it return to bond markets as early as this summer.

Tax hikes

Government spokesman Dimitris Tzanakopoulos also dismissed the report, saying a deal on debt relief could be reached at the next scheduled meeting of euro zone finance ministers in less than three weeks.

“It is not true,” Tzanakopoulos told Reuters. “There will be a solution on June 15.”

In a statement to the Athens News Agency, he suggested that the report was politically motivated.

Prime Minister Alexis Tsipras told German Chancellor Angela Merkel and French President Emmanuel Macron in separate phone calls on Monday that Greece needed a “clear solution on debt”, a government official said. Tsipras also discussed the issue with EU Council President Donald Tusk on Tuesday, the official added.

To convince the IMF to participate financially in Greece’s programme, as sought by Germany, Athens passed legislation this month on additional pension cuts and tax hikes, which will be implemented after its bailout expires in 2018, as demanded by the IMF.

The Washington-based fund says Greece needs further debt relief. Germany, which is gearing for elections in September, says Greece needs to speed up reforms instead. Tsipras’s term ends in 2019 and his party is sagging in the opinion polls.

Speaking to journalists on Monday, Tsakalotos said Greece had “done its part of what it promised” and called on its creditors and the IMF to reach a deal on debt relief saying it was in everyone’s benefit.

“If they don’t reach a solution it will be very difficult to defend it to the international community. What will they say? That the Greek government did all that we asked for and more but we are still going to send it to the rocks?

“We are looking for a good solution, we are not looking for the perfect solution. I am confident we can get a good solution,” he said.