Greece moves closer to eurozone exit after delaying €300m repayment to IMF

Athens takes creditor by surprise, saying it will bundle together €1.6bn of debt payments due to International Monetary Fund and settle up on 30 June

Greece has moved closer to default and possible exit from the eurozone after telling the International Monetary Fund it would not be making a debt repayment of €300m (£219m) due on Friday.

A crisis that has been going on for more than five years entered a new phase when Athens surprised the IMF by saying it intended to bundle up four payments in June totalling €1.6bn and make them all at the end of the month.

The move came as the Greek government reacted angrily to what was seen as an ultimatum from its creditors – including the IMF – that demanded further austerity and unpopular reforms to VAT, pensions and wage bargaining as the price for €7.2bn in fresh financial help.

Although Greece’s financial position has become increasingly serious in recent months, Athens had the ability to make the €300m payment and the country’s prime minister, Alexis Tsipras, gave the IMF managing director, Christine Lagarde, an assurance earlier this week it would be made on time.

Asked about the repayment due on Friday, Lagarde told reporters: “The payment had been honoured and will be honoured. I think his words were, ‘Do not worry.’ I’m confident that will continue to be the case.”

Instead, the decision to delay payments appears to be a show of defiance by Athens against what it sees as unacceptably harsh terms being demanded by its creditors. This increases the chances of Greece defaulting on its debts, losing the support for its weak financial sector from the European Central Bank, and eventually being forced to leave the single currency.

“It will never pass,” said Greece’s deputy social security minister, Dimitris Stratoulis. “If they don’t back down, the country won’t be lost … there are alternatives that would cost less than our signing a disgraceful and dishonourable agreement.”

Full article: Greece moves closer to eurozone exit after delaying €300m repayment to IMF (The Guardian)

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