Grexit: Greece Fails to Pay €1.6 Billion Debt to IMF

Greece has failed to repay €1.6 billion loan to the International Monetary Fund (IMF), hours after eurozone ministers refused to extend its bailout.

However, eurozone ministers say they will discuss a last-minute request from Greece for a new two-year bailout on July 1.

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 June 30.

“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.

Gerry Rice confirmed the IMF had received a request from Greece to extend the payment deadline, which he said would go to the board “in due course”.

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

The European Central Bank (ECB) has also frozen its liquidity lifeline to Greek banks. Meanwhile, ratings agencies have further downgraded the country’s debt.

Eurogroup chairman and Dutch Finance Minister Jeroen Dijsselbloem earlier said it would be “crazy” to extend the Greek bailout beyond its June 30 deadline as Athens was refusing to accept the European proposals on the table.

Greece’s left-wing Syriza government, elected on an anti-austerity platform, has been in deadlock with its creditors for months over the terms of a third bailout.

Speaking after the conference call with other eurozone ministers, Jeroen Dijsselbloem said that a Greek request for a new €29.1 billion European aid program would be considered in a telephone conference on July 1.

According to new reports, Greece may submit new proposals on July 1 that rein in its spending

Greece’s request on June 30 asked for funds from Europe’s bailout fund – the European Stability Mechanism – as well as a restructuring of Greece’s public debt.

German Chancellor Angela Merkel earlier said she had ruled out further negotiations until after July 5 referendum, which will ask Greeks if they want to accept the deal offered by their creditors.

The Greek government took the unilateral decision to hold a vote last weekend, angering eurozone ministers.