Greece defaults to IMF

Washington, July 1 (IANS/EFE) The International Monetary Fund (IMF) confirmed on Tuesday that debt-laden Greece is in arrears after missing a payment of 1.5 billion euros ($1.7 billion).

Athens had until 6 p.m. Tuesday to make the payment.

“I confirm that the SDR 1.2 billion repayment (about 1.5 billion euros) due by Greece to the IMF today has not been received. We have informed our executive board that Greece is now in arrears and can only receive IMF financing once the arrears are cleared,” the fund’s communications director, Gerry Rice, said in a statement.

Greece becomes the first advanced nation to default on an obligation to the IMF in the more than seven decades the Washington-based institution has been in existence.

“I can also confirm that the IMF received a request today from the Greek authorities for an extension of Greece’s repayment obligation that fell due today, which will go to the IMF’s executive board in due course,” Rice said.

Greek Finance Minister Yanis Varoufakis said earlier Tuesday that Athens would not make the payment.

Greece’s Eurogroup partners turned down Prime Minister Alexis Tsipras’ request for a brief extension to the second financial rescue programme, set to expire at midnight Tuesday.

In a letter to the Eurogroup, the Greek leader said the extension would allow Athens to avert a “technical default”.

He also formally requested a third rescue and Eurogroup ministers are scheduled to hold another conference call on Wednesday to review that proposal.

Tuesday marks the final day of the four-month extension agreed on in February by Greece and what is known as the troika: the European Union, the European Central Bank and the IMF.

Talks aimed at paving the way for the disbursement of the remaining 15.5 billion euros ($17.3 billion) of the second rescue broke up in acrimony last Friday.

Tsipras’ Syriza party, which won election early this year on a promise to throw off troika-mandated austerity policies that have pushed Greece’s unemployment rate above 25 percent even as the country’s indebtedness has continued to soar, put forward last week a plan that crossed its own “red lines” by including cuts to pensions.

The creditors, however, demanded additional concessions that the Greek government deemed unacceptable.

Hours after the talks in Brussels ended last Friday, Tsipras announced a July 5 referendum in which Greeks will be asked to vote “yes” or “no” on accepting the troika’s latest proposal, though it remains unclear whether that offer will still be available come July 6.

The Greek government has declared a week-long bank holiday and imposed capital controls as Athens faces the possibility of running out of money.

 

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