Greece Risks Losing Future Bailout Funds

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The question of what to do about Greece if it defaults on its debts is a topic at World Bank and IMF meetings in Washington this week.

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Transcript

RACHEL MARTIN, HOST:

The International Monetary Fund and the World Bank are wrapping up their spring meetings in Washington today. Officially, the meetings are about big issues like trade and falling oil prices. But behind the scenes, much of the discussion this past week has been about one country - Greece - and whether the new left-wing government there will default on its debts. NPR's Jim Zarroli reports.

JIM ZARROLI, BYLINE: On the surface, at least, officials at this week's meetings tried to sound a conciliatory tone. They spent much of the week in talks with Greek officials, and said they were more than willing to help Greece get its finances in order. IMF head, Christine Lagarde, spoke at a press conference yesterday.

(SOUNDBITE OF PRESS CONFERENCE)

CHRISTINE LAGARDE: My hope is that we can really move, makes progress and be as positive and as productive as we can with the Greek authorities for the benefit of the Greek economy and the Greek people.

ZARROLI: But behind the scenes, officials were clearly losing patience with Greece. Spain's finance minister told reporters that Greece hasn't made any friends at the meetings. U.S. Treasury Secretary Jacob Lew urged Athens to work out a deal with its creditors. Greece is supposed to receive the last installment of its bailout funds from European creditors, but the new Greek government elected in January has balked at the terms. Greek Finance minister Yanis Varoufakis criticized the harsh austerity measures imposed on his people in recent years. He said asking Greece to do more by, for instance, selling off state-owned industries in the middle of a depression makes no sense.

(SOUNDBITE OF ARCHIVED RECORDING)

FINANCE MINISTER YANIS VAROUFAKIS: The Greek people did not vote for us because they believed the Greek success story of last year. They voted for us because they knew that it was smoke and mirrors.

ZARROLI: But Greece's creditors are demanding that it come up with a new plan to solve its financial problems, or risk losing the next installment of bailout funds. And if Greece can't more bailout money, it could miss some of the debt payments it's supposed to make in coming weeks. And that could trigger a default that would be felt throughout the world's financial markets. At a press conference yesterday, the head of the European Central Bank, Mario Draghi, brushed aside questions about whether Greece would default.

(SOUNDBITE OF ARCHIVED RECORDING)

MARIO DRAGHI: They don't want even to contemplate for the reason that the Greek leaders have repeatedly state that they intend to honor all their obligations.

ZARROLI: But in private, European officials made clear they don't know how the latest round of brinkmanship will end. One hopeful sign seemed to come yesterday when a German newspaper reported that Greece had agreed to a lucrative natural gas deal with Russia and would announce it within days. Such a deal would go a long way toward helping Greece pay off its debts. But Russian officials disputed the report saying the deal wasn't final.

Jim Zarroli, NPR News, Washington.

MARTIN: You're listening to NPR News. Transcript provided by NPR, Copyright NPR.