Greece

Defaults
on IMF

enough to save the country from becoming the first

developed economy to default on a loan with the
International Monetary Fund.
The left-wing Greek government had asked European
partners for a two-year aid package to cover its
financing needs. Later on Tuesday, Greeces Finance
Minister Yanis Varoufakis indicated on a call with
European counterparts that Athens might scrap a
controversial July 5th referendum if a deal was
reached, according to euro zone sources.
The flurry of diplomacy was an attempt to bring
creditors back into talks after five months of
inconclusive negotiations brought Greece close to
leaving the euro currency bloc.
It came as tens of thousands of people descended on
Athens central Syntagma square over the past 24
hours in two different rallies one to support the
government and the other to push for Greece to
remain in the euro.
Greece, as expected, was not able to repay 1.6 billion
euros it owed to the International Monetary Fund, in
what was the largest missed payment in the Funds
history.

Greece, as expected, was not able to repay 1.6

billion euros it owed to the International
Monetary Fund, in what was the largest missed
payment in the Funds history.Late on Tuesday,
the IMF said it would examine a Greek request
for a payment extension in due course.
The latest Greek proposals came too late to
prevent Greeces existing aid package with
locked-up funds it needs to pay wages, salaries
and debt from expiring.
Still, in a sign that European officials have not
given up on finding a solution for Greece,
finance ministers said they would confer on
Wednesday over Tsipras latest loan request,
effectively coming back to the negotiating
table.Sources said the officials are expected to
discuss on Wednesday Greek Prime Minister
Alexis Tsipras request for the new two-year
loan to pay debts that amount to nearly 30

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A Greek official said that, as of late Tuesday,

there were no changes in the planned

DEFAULT

Greece has received nearly 240 billion euros in two

bailouts from the European Union and International
Monetary Fund since 2010. The money has allowed
the country to stay afloat butat a high cost to its
population, which has swallowed many austerity
measures such as cuts to pensions, wages and
public services.With its missed payment to the IMF,
Greece is on a path out of the euro with
unforeseeable consequences for both the EUs
grand currency project and the global economy.
What would happen if Greece came out of the
euro? There would be a negative message that euro
membership is reversible, said Spanish Prime
Minister Mariano Rajoy, who a week ago declared
that he did not fear contagion from Greece.People
may think that if one country can leave the euro,
others could do so in the future.
IMF Managing Director Christine Lagarde will

advanced economy has defaulted on a loan from

the worlds financial backstop, putting Athens,
which has seen its economy contract by more than
25 per cent since 2009, in the same bracket as
Zimbabwe, Sudan and Cuba.
Already the imposition of capital controls to prevent
the crippled banking system from collapsing have
given Greeks a bitter foretaste of the economic
plunge that could follow exit from the euro.
Withdrawal limits of 60 euros a day have been fixed
for cash machines and there have been long
queues at petrol stations and in supermarkets as
worried shoppers stocked up on essentials like
pasta and rice.
There were no immediate signs of serious shortages
but if the banks remain closed, cash flow problems
which have already been reported by some firms,
could worsen.
So far there are no problems with suppliers, but if
the banks are still closed next week there will be a
bit of a problem if they demand purely cash
payments, said Charisis Golas, owner of a small

DEFIANCE
In Athens, opposition leaders echoing EU
officials hammered home on Tuesday that the
choice facing Greeks in the referendum is
whether to stay in the euro zone or return to the
drachma, even though the EU has no legal way of
forcing a member state to give up the single
currency.
Former Greek Prime Minister Antonis Samaras,
leader of the main opposition party, said a No
vote would push the country out of the single
currency and wipe out wages and pensions.
The euro fell against the dollar but European
shares, which dropped sharply on Monday,
steadied on hopes of a deal. The Athens stock
exchange is closed during a week-long shutdown
of the banking sector which began on Monday.
Opinion polls show a majority of Greeks favour

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