Greece defaults on IMF payment

Today, Greece has taken the drastic step of missing a €300 million payment to the International Monetary Fund and raised fears about the future of Europe’s single currency.

The Athens Government will have until 30 June to pay the €1.5 billion total, which is also the day on which its bailout deal with the EU and IMF runs out.

The economy minister George Stathakis, said the government was unable to accept the terms set out by its creditors, who are demanding bigger budget surpluses and tougher cuts to pensions as well as an overhaul of its labour market.[1]

According to the BBC, IMF spokesman Gerry Rice said that under a precedent dating back to the late 1970s, governments could ask to bundle together “multiple principal payments falling due in a calendar month… to address the administrative difficulty of making multiple payments in a short period.”[2]

The Guardian has reported that the skipped payment is the clearest sign to date that the crisis is escalating to a dangerous level as the Sriza party refuses to buckle. It will not be resolved without European statesmanship of a high order, so far lacking.[3]

Alexis Tsipras, the Greek Prime Minister, had previously hinted that Greece would be able to cover this payment to the IMF. Thus whilst previously promising top EU officials that a deal with creditors was “within sight,” he has now undercut this completely by insisting that the only “realistic proposals on the table” are the alternative measures put forward by the Greek government earlier this week in a 46- page document[4].

[1] Jill Treanor,
[2] BBC News,
[3] Jill Treanor,
[4] Ambrose Evans-Pritchard, The Telegraph Online