The default on the IMF loan means that the amount will now get added to the IMF's arrears, which means that the IMF will soon send a cable urging Greece to keep uphold its part of the bargain and make the payment as soon as possible. Failing which, the country will have to eventually pay the loan back with interest.
In a move that will make Greece default on its payment to the International Monetary Fund (IMF), Greece Finance Minister Yanis Varoufakis said that the country will not be paying the IMF loan today, i.e. defaulting.
With this move, Greece will officially be defaulting on its debt repayment deadline to pay back the first instalment of 1.7 billion euros of the total 21.2 billion Euros it owes the IMF. However, with reports coming in that backdoor negotiations are still on between Athens and European Union, a deal might still be on the cards.
The default on the IMF loan means that the amount will now get added to the IMF's arrears, which means that the IMF will soon send a cable urging Greece to keep uphold its part of the bargain and make the payment as soon as possible. Failing which, the country will have to eventually pay the loan back with interest.
The last five months of negotiations between Greece Prime Minister Alexis Tsipras and the troika of Greece's creditors – the IMF, European Central Bank (ECB) and European Commission) – has been nothing short of dramatic. Where the troika was struggling hard to get Greece onto the negotiating table, Prime Minister Tsipras had been rejecting them one after the other, refusing to move from his party's mandate of 'no more austerity', thereby upholding the promises made to his people during his campaign and election win.
Things finally reached a stage where Tsipras called for a referendum on July 5, which is after the debt deadline and the bailout expiry, less than a week before the due date, thereby pushing the troika off the table, and Greece closer to an unceremonious exit out of the European Union. Since then, Greece has been painted in 'OXI' graffiti urging it for a 'no' vote in the referendum, failing which, Tsipras has threatened to resign, saying that he will not stay in office to oversee more cuts if Greece votes 'yes'.
European Union President Jean-Claude Juncker made a last-ditch effort hours before the deadline to still try and strike a deal.
What's next on Greece's calender?
This detailed Wall Street Journal infographic gives an extensive timeline of the upcoming deadlines for Greece. Mentioned here are the few upcoming ones.
July 5: Referendum:
a) Greece's electorate votes on the bailout package, thereby also deciding on the fate of its European Union membership. There is no exit clause in the EU agreement membership, which means it will challenge the very principle the single-currency unit is based upon.
b) A 'no' vote will dissolve the troika's bailout package, and they might take a long time to come up with the next deal
July 6-7: Banks likely to reopen
Banks, sans those that have been kept accessible for pensioners, are due to open for operations. However, an extension of the bank 'holiday' is not unexpected, and the same has been acknowledged by the government. In 2013, Cyprus said it was shutting its banking system only for a week in March, during its financial unrest, but the bank 'holiday' continued well into a month.
July 13: 4.5 billion euro IMF deadline
Greece is expected to repay the second instalment of its debt to the IMF
July 20: 20.95 billion euro ECB deadline
The ECB, along with European Financial Stability Fund (EFSF) and other European union central banks are the biggest lenders to Greece – they hold 57% of the total Greek debt. Greece is expected to pay 20.95 billion euro to the ECB on this date.
While everyone has been stuck on the 'what ifs' of a debt repayment deadline, the truth is that the wrost is far from over for Greece. This is only the beginning of the debt repayment deadlines that Greece is going to face, with the next one less than two weeks away.
(With agencies)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}