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Greece defaults on IMF payment

Greece defaults on IMF paymentGreece became the first developed country to default to the International Monetary Fund (IMF), an organization of 188 nations that tries to keep the world economy stable.

The IMF confirmed that Greece had not made its scheduled 1.6 billion euro loan repayment to the fund. As a result, IMF Managing Director Christine Lagarde will report to the global lender’s board that Greece is “in arrears,” the official euphemism for default.

Greece will now be cut off from access to IMF resources until the payment is made.

The move came hours after the country made a desperate attempt Tuesday to halt its plunge into economic chaos by requesting a new European bailout.

Greece asked for a two-year bailout from Europe, its third in six years. The bankrupt country is reported to be asking for 29 billion euros ($32 billion).

Greek banks remained shut Tuesday and limits on cash withdrawals were in place as the country tried to stave off financial collapse before the vote.

Daily withdrawals are limited to 60 euros, or about $67.

The country’s banks have been bleeding billions of euros for months, even before the country’s debt crisis took a dramatic turn for the worse this weekend, leading to long lines at ATMs in Athens.

The flurry of diplomacy came as tens of thousands of people descended on Athens’ central Syntagma square over the past 24 hours in two different rallies – one to reject additional austerity measures and the other to push for Greece to agree to the terms in order to keep the financial spigot open.

In a sign that European officials have not given up on finding a solution, finance ministers said they would confer on Wednesday over Greece’s latest loan request and debt restructuring.

It was unclear how much the Wednesday call could achieve. Trust between Athens and European capitals is in tatters after five months of acrimonious negotiations, and the relationship further deteriorated after Athens on Saturday decided to put creditors’ proposals to a referendum.

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