01 July 2015

EUbusiness: Greece becomes first developed country to default on IMF

The missed payment made Greece the only developed country ever to fall into default with the global crisis lender and underscored the utter failure of more than five months of efforts to reshape the rescue of the country's economy and prevent it from dropping out of the eurozone.

The future of efforts to restore its finances and meet creditor demands for reforms were in question, with fresh proposals from Athens spurned Tuesday as the country moved toward a referendum Sunday on EU bailout offers.

IMF spokesman Gerry Rice confirmed that the payment due in Washington at 2200 GMT Tuesday had "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," he said in a statement.

Greece had made a last-minute request for the IMF to extend the payment deadline, something the crisis lender has only done twice before, in 1982 for Nicaragua and Guyana.

Rice confirmed the request but the board did not rule on it. The request "will go to the IMF's Executive Board in due course," he said.

[...]

As the IMF froze its loan program to the government, the European Commission-European Central Bank assistance also expired on Tuesday.

That means the lenders the country has relied on since 2010 to balance its finances have cut it off, heightening expectations that it will also default in July on payments to the EU and possibly make a tumultuous exit from the eurozone.

Full article on EUbusiness

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