Greece has officially missed its payment to the IMF.
Though this is not technically considered a “default” — the IMF now considers Greece “in arrears” — Greece has now officially not paid the 1.6 billion euros (or about $US1.8 billion) it owed the IMF by Tuesday.
IMF managing director Christine Lagarde, however, said in June that she would consider Greece in default if it did not pay.
This is the largest missed payment ever owed to the IMF.
Greece is now no longer in a bailout program for the first time since 2010.
In a statement, the IMF confirmed that Greece missed the payment due on Tuesday and added that Greece requested an extension of its repayment, which the IMF’s executive board will consider “in due course.”
Greek banks and the Athens stock exchange remain closed through this week ahead of a July 5 referendum to vote on the latest bailout proposal from Greece’s creditors.
This was, however, expected.
Earlier on Tuesday, Greek finance minister Yanis Varoufakis said that Greece wouldn’t pay the IMF. Later in the day, Greece submitted another proposal to its European creditors seeking an additional 2-year bailout and the ability to receive whatever funding needed to meet its debt obligations. This proposal was rejected.
Eurogroup finance ministers are now set to meet on Wednesday to discuss the Greece situation. Reports from Greek media indicate that Greece could bring another proposal to the table.
And so the path forward from here for Greece isn’t entirely clear. There is the Sunday referendum — which some have called, effectively, a vote for Greece to either remain in or leave the euro.
Beyond that, Greece has a July 20 payment of 3.5 billion euros due to the ECB.
But as Peter Tchir, a strategist at Brean Capital, wrote in an email on Tuesday afternoon, “We are in unchartered territory.”