Time for Greece to quit euro? Athens shocks IMF by missing £220m repayment on bailout
GREECE has delayed a key debt payment to the International Monetary Fund due today, the first time in five years that it has postponed a repayment on its 240 billion euro bailout.
The standoff between Greece and the IMF intensified as Athens informed the global lender that it plans to bundle four payments due this month into a single 1.6billion euro (£1.2bn) lump sum, payable on June 30. A 300million euro (£220million) repayment had been due today.
“Under an Executive Board decision adopted in the late 1970s, country members can ask to bundle together multiple principal payments falling due in a calendar month,” IMF spokesman Gerry Rice said in a statement.
The drastic measure is the first time in history that a western nation has resorted to bundling IMF debt repayments.
The Greek Prime Minister Alexis Tsipras warned the country is set to go bankrupt unless it gets an additional bailout loan from its EU creditors.
But Mr Tsipras faces fury at home from leftist supporters who helped him into power in January on a promise to end austerity, if he accepts the current terms attached to the cash by officials.
He returned from late night talks with EU officials in Brussels to face an outcry over conditions that would breach the “red lines” his Syriza party has declared.
The move to delay the repayment is also likely to dent relations between Greece and its international lenders even further, at a time when leading politicians are struggling to build up trust and save the flaiing eurozone nation.
The Prime Minister has repeatedly said that it can't accept “extreme proposals” from its creditors, who want reforms to pensions and labour markets in Greece.
Mr Tsipras yesterday took to Twitter and added: "Our People have suffered enough during the past five years".
It comes after he accused EU officials of trying to create an all-powerful EU super-state that bullied entire countries into accepting its terms.
Both sides have reamined optimistic that an agreement can be reached - despite the large gaps that remain to be bridged.
However, with Greece completely out of cash, the situaton is urgent.
Athens may have bought more time to make the debt repayments to the IMF but it's unclear how long it will be able to pay state wages and benefits without the EU loan.
In recent weeks Greece has already struggled to pay pensions and employees on time.
And savers have started to pull cash out of accounts over fears that the government will start to dip into their money.
The Government will not accept extreme proposals. Our people have suffered enough during the past five years. #Greece pic.twitter.com/5wUSoNtw0I
— Alexis Tsipras (@tsipras_eu) June 4, 2015