Greece does not make the payment to the IMF – The Economist

A government official said he did not meet the financial commitment.

Thousands protested in Athens against austerity measures demanded of Greece by its creditors. Photo: Reuters

Greece will not make a payment of 1,600 million euros in loans from the International Monetary Fund (IMF), said a government official in Athens , highlighting the depth of the financial crisis facing the country.

The ministers have repeatedly said that Greece would not have the funds to pay the IMF, unless an agreement is reached with creditors to 7,200 million euros unlock frozen during the negotiation of both parties to the conditions required to Athens for help.

The weekend talks broke down, leading to the imposition of capital controls on banks Greeks.

According to the latest report of IMF financing operations, the default lead to the cancellation of direct access to over disbursements for Greece in the body, but not for technical cooperation.

At present the default, it would trigger a phase of reporting to the Board and to the country itself in arrears, pending which may be given the cooperation and interest of the borrower to honor its obligations.

This process would last a month, but the IMF managing director, Christine Lagarde, said Saturday that once the payment is not run by Greece, shall immediately notify the Board, which would accelerate the process towards Phase action.

Average Year and patience

According to the same schedule, if you spend 15 months without the accredited collaborate, is suspended immediately technical support, you will revoke the creditor delinquent voting power and enter into the procedure for automatic expulsion. But the same managing director has said he will not grant more grace periods to Greek government.

This extreme measure requires the approval of 85% of the members and presented only once, in 1954, when they drove the body to Czechoslovakia extinct.

According to the financial state of Greece at the IMF, the government of Alexis Tsipras would have to pay off the 25,000 million euros owed to the agency in 2019 .

From falling into arrears with the IMF, Greece will not have access to 7,500 million required this year to meet other obligations bag would be built with funds from the IMF, the European Central Bank and the European Rescue Fund.

Earlier this month, the Greek government said it would not pay the maturity of 300 million euros at that time had to pay instead group together all payments June and pay the 30th (With information from agencies)

S & P reacts and cut the sovereign rating of Athens

The rating agency Standard and Poor’s downgraded Greece to “CCC” , considering that the decision of Athens to hold a referendum to decide whether to accept the bailout of creditors is a bad sign for the “economic stability” of the country.

“The decision to convene Greece a referendum on the plan by creditors is a further sign that the government will favor Tsipras domestic politics to the detriment of economic and financial stability (and) the payment of debt “, he estimated the agency said in a statement.

S & P evaluates to “50%” the risk of Greece leaving the eurozone and ensures that no “positive developments”, the country will enter “inevitably” in default on its detained debt in the private sector “in six months.”

The new note has a negative outlook. The agency added that degrade again in the “next six months” if, for example, which does not comply with its private creditors.

The note would then be relegated to “SD” (selective default) indicates the rating.

Default partial banks

Fitch Ratings put on “partial default” four major Greek banks following the introduction of capital controls in the country to stop a leak mass and a bank run.

“The degradation of NBG notes (National Bank of Greece), Piraeus, Eurobank and Alpha reflects Fitch’s view that these banks have failed and have fallen into default if no capital controls Thus was laid, given the high rate of deposit withdrawals and the ECB’s decision not to raise the ceiling of the emergency liquidity assistance the Bank of Greece, “the agency said in a statement. (With information from AFP)

The Hellenic measures capital controls

• After banks: will be closed until Monday July 6 and will reopen on Tuesday 7 July
• The withdrawal of money from ATMs limited to 60 euros per person per day: accounts with two holders may withdraw 120 euros with the same card;. foreign tourists may withdraw as much money as they want within the limits of the funds available
• Payments by credit cards:. the trade account with a bank should keep accepting card payments. The same applies to Internet shopping
• Transfer outwards. Transfer via Internet from Greek accounts is authorized. Outward transfers will be subject to review by a Validation Committee of banking transactions of the Ministry of Finance. The commission will take into account “the public and social interest” of the transaction, including whether it is health expenses
• Retirements:. The payment of pensions is exempt from the limitation of banking transactions. It works to open banks on Thursday for their retirements
• There will be free shuttle until the banks open. residents and foreigners can use the subway, buses and free trams in the capital and in its periphery.

“No money, no hope,” the Greeks in the yard

The Greeks came Monday at the corralito “without money or hope” after the government decreed the closure of banks for eight days and limited to 60 euros daily money that can be withdrawn from ATMs.

“Tomorrow (today) wages are paid. But the banks are closed and my boss has no money. What are we going to do? We have to pay the bills, “said concerned Sofia Chronopoulos, a young saleswoman tissues.

The Greek economy is based on the cash and Greece is a country where less you pay with bank cards.

As Sofia, many Greeks are wondering how they will be given in the coming days, during which only can count on 60 euros per day until next Tuesday, July 7.

Yesterday morning many ATMs were not replenished. “The cashier does not work”, Vaggelis, he is not worried by the maximum of 60 euros explains. “It’s enough for me.”

The Greeks began to empty the cash after the decision to call a referendum on Sunday was announced.

“no money and no hope. How did we get to this situation? “Asks Chris Bakas, an unemployed 28 years.

Nikos Gyallitsis, owner of a cafe in the center of Athens, estimates it will lose 50% billing and fears, as many traders that their clients disappear. “People are going to save the money for food and gasoline,” he says. (With information from AFP)