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IMF: Greece misses debt repayment

July 1, 2015

The International Monetary Fund (IMF) has confirmed that Greece has missed the deadline for it to make a 1.6-billion-euro debt repayment. Greece had made a last-minute request for the debt to be extended.

Griechenland Nationalfahne
Image: Reuters/A. Konstantinidis

The IMF officially confirmed shortly after midnight Central European Time that the 1.6-billion-euro ($1.8-billion) debt due by Greece had not been paid. Failure to meet the payment meant that the country officially fell into default.

"We have informed our executive board that Greece is now in arrears and can only receive IMF financing once the arrears are cleared," said IMF spokesman Gerry Rice. The missed payment is the largest in the Fund's history, and makes Greece the first developed economy to default on a loan with the IMF - raising doubts about its future within the eurozone.

Rice said the Fund had received a request to have the payment extended, but said that it had not yet been ruled upon by the IMF's board. The request was set to be passed to the board "in due course," said Rice.

The expiry of the deadline came after failed attempts on Tuesday from Greece to resuscitate its bailout deal with the European Union.

Talks by telephone

The left-wing Greek government had asked European partners for a two-year aid package to cover financing needs totalling nearly 30 billion euros. According to sources close to negotiations, Greece's Finance Minister Yanis Varoufakis indicated in a call with European counterparts on Tuesday that Athens might be prepared to scrap a July 5th referendum on extension of the bailout funding.

However, his eurozone counterparts said no deal could be done.

"It would be crazy to extend the program," said Dutch Finance Minister Jeroen Dijsselbloem, who heads the eurogroup of eurozone finance ministers. "So that cannot happen and will not happen."

No negotiations before poll

Meanwhile, German Chancellor Angela Merkel told her Christian Democrat (CDU) party that she ruled out further negotiations with Greece ahead of Sunday's referendum for Greek voters on whether to accept creditors' demands for budget reforms.

"Before the planned referendum is carried out, we will not negotiate over anything new," the DPA news agency quoted Merkel as saying.

Tsipras was reported on Tuesday to be considering a proposal by European Commission President Jean-Claude Juncker to head off default. Under the proposal, Tsipras would have been required to accept the terms of a deal he rejected at the weekend, and would have had to recommend a "Yes" vote to his people for Greece to stay in the bailout structure and eurozone.

rc/jr (AFP, AP, dpa, Reuters)