And they’re already another two weeks away from running out of cash. The can can’t be kicked down the road forever.
Athens is forced to tap reserves at an escrow account at the IMF after reports suggest the Fund will not participate in a fresh Greek bail-out
Greece avoided an unprecedented default to the International Monetary Fund today after raiding an emergency cash account at the Fund, in a major sign the country is edging ever closer to stiffing its senior creditor.
Athens tapped €650m from an escrow account at the IMF, scraping together a further €100bn in cash reserves to avoid going into arrears, said Syriza MP Dimitris Vitsas.
The news came after reports in Spanish paper El Mundo said the IMF was ready to pull the plug on the debt-stricken country.
Fund officials reportedly told European finance ministers they had grave concerns about Athens willingness to slash spending, raise tax revenues, and implement a raft of structural reforms, ruling themselves ouf of a fresh rescue which could be worth €30bn-€50bn.
The move to effectively shift funds from different accounts at the IMF signals Greece has all but run out of cash to meet its international and domestic obligations. According to estimates, Greece only has a paltry €90m in spare cash reserves, making it unable to fulfil its monthly wage and pensions bill of €1.7bn for May.
Greece owes the IMF a total of €9.7bn this year, while more €3.5bn of the remaining €7.2bn in bail-out cash is due to come from the Fund if a deal with creditors is agreed.
Christine Lagarde has maintained the IMF will not countenance a default from any debtor nation. The Fund holds “senior creditor” status among Greece’s creditors, and will require repayment of a further €2bn over the course of June and July.
Full article: Greece raids IMF emergency account to avoid unprecedented default (The Telegraph)