Greece debt crisis: IMF payment missed as bailout expires

The main slogan of Tuesday's protest was: "We're staying in Europe"

The main slogan of Tuesday’s protest was: “We’re staying in Europe”

Greece has missed the deadline for a €1.6bn (£1.1bn) payment to the International Monetary Fund (IMF), hours after eurozone ministers refused to extend its bailout.

But the ministers said they would discuss a last-minute suggestion from Greece for a new bailout programme.

Greece is the first advanced country to fail to repay a loan to the IMF and is now formally in arrears.

There are fears that this could put Greece at risk of leaving the euro.

The IMF confirmed that Greece had failed to make the payment, shortly after 22:00 GMT on Tuesday.

“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.

With the eurozone bailout expired, Greece no longer has access to billions of euros in funds and could not meet its IMF repayment.

Eurogroup chairman and Dutch Finance Minister Jeroen Dijsselbloem earlier said it would be “crazy” to extend the Greek bailout beyond its Tuesday midnight expiration as Athens was refusing to accept the European proposals on the table.

Speaking after the conference call with other eurozone ministers, he added that a Greek request for a new €29.1bn European aid programme would be considered later.

The European Commission – one of Greece’s “troika” of creditors along with the IMF and the eurozone’s European Central Bank – wants Athens to raise taxes and cut welfare spending to meet its debt obligations.

Amid fears of a Greek default on its huge public debt of €323bn, people have queued at cash machines. Withdrawals are capped at just €60 a day.

Greek banks did not open this week after talks between Greece and its creditors broke down. However, up to 1,000 bank branches will re-open from Wednesday to allow pensioners – many of whom do not use bank cards – to withdraw up to €120.

Analysis: By Andrew Walker, economics correspondent

The sky will not fall in now the deadline for Greece to repay to the IMF has passed, but the tension will rise.

When a payment to the IMF is missed and managing director Christine Lagarde informs her board, the eurozone would have the right under the loan agreements to demand immediate repayment of more than €180bn they have already lent Greece, together with interest.

Failure to repay the IMF comes under a list of “events of default” set out in the legal documents. IMF officials say Ms Lagarde intends to inform the board promptly if Greece doesn’t pay on time.

Of course, in practice, the rest of the eurozone won’t demand the money back and send in the bailiffs. Athens couldn’t possibly repay and in any event they want to keep talking, hoping they can keep Greece in the eurozone. But the fact that they would have the option is a sign of how close Greece is getting to the brink.

BBC

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