Markets participants will once again pay their attention to Greece. Firstly, with the Greek government said as running out of funds, the IMF loan repayment of €460m will be closely monitored on 9 April. PM Tsipras indicated that if faced with a choice of not paying pensions and civil servants' wages or not paying international creditors, he would choose the latter.
"As a result, we cannot rule out a late payment to the IMF. Should Greece join the three countries that have a late payment to the IMF (Somalia, Sudan and Zimbabwe), this would have no immediate implication for market debt. However, this would be a sign that Greece remains intent on playing hardball with its creditors", says Societe Generale.
The IMF and other major advanced countries would likely put strong pressure on Euro area policymakers and Greece to quickly fix this late payment.
The base case remains that sufficient agreement will be reached on Greece to kick the can down the road, but risk of failure is not negligible. The Greek government hopes that the list of reforms sent last week will help unlock part of the disbursement of the €7.2bn instalment under the remaining troika tranches that are currently frozen.
This includes a) €1.8bn from the EFSF; b) €1.84bn from ECB profits on the Greek bonds purchased under the SMP programme c) the pending tranches from the IMF programme (€3.5bn).
