The cash-starved Greek government became the first developed nation to ever default on its obligations to the IMF by not making the repayment of a 1.55-bln-euro instalment to the Fund on June 30. Failure to pay comes after a Zambia-styled debt bundling earlier this month, and after Finance Minister Yanis Varoufakis pledged that his government would “squeeze blood out of a stone” to meet its payment.
IMF Chief Christine Lagarde issued a statement on Wednesday, July 1, expressing her “disappointment” at the SYRIZA government’s failure to achieve a deal with institutional creditors and either extend the lapsed second bailout plan or work out another agreement.
“I have briefed the IMF Executive Board on the inconclusive outcome of recent discussions on Greece in Brussels. I shared my disappointment and underscored our commitment to continue to engage with the Greek authorities.
The coming days will clearly be important. I welcome the statements of the Eurogroup and the European Central Bank to make full use of all available instruments to preserve the integrity and stability of the euro area. These statements underscore that the euro area today is in a strong position to respond to developments in a timely and effective manner, as needed.
The IMF also will continue to carefully monitor developments in Greece and other countries in the vicinity and stands ready to provide assistance as needed.
I continue to believe that a balanced approach is required to help restore economic stability and growth in Greece, with appropriate structural and fiscal reforms supported by appropriate financing and debt sustainability measures. The IMF is prepared to continue to pursue that approach with the Greek authorities and our European partners.”
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