IMF Warns No Leeway on Payment as Merkel Urges Greece to Bow

International Monetary Fund chief Christine Lagarde said Greece won’t be given a grace period if it fails to make a payment at the end of the month as Chancellor Angela Merkel said there’s still time to reach a deal on aid.

Lagarde, whose policies were labeled “criminal” last week by Prime Minister Alexis Tsipras, said that Greece will immediately be considered in default unless it pays about about 1.5 billion euros ($1.7 billion) due to the fund on June 30.

“It will be in default — it will be in arrears vis-a-vis the IMF, yes, on July 1,” Lagarde said at a press conference in Luxembourg where euro-area finance minister meet on Thursday to discuss the deadlock over Greece. “I hope it’s not the case, I really do.”

IMF Rules

Under IMF rules, once a payment becomes overdue, a nation immediately becomes ineligible for additional funds until the arrears are cleared. IMF staffers contact the borrower to urge it to “make the payment promptly” and follow up with the nation’s representative on the IMF’s executive board, according to a 2012 IMF report.

If the payment is still overdue after a month, the head of the IMF notifies the board and after another month, the chief issues a formal complaint to the board.

“I have a deadline, which is the 30th of June, when a payment is due from Greece,” Lagarde said. “There is no grace period.”

Full article: IMF Warns No Leeway on Payment as Merkel Urges Greece to Bow (BloombergBusiness)

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