Greece Doesn't Have Enough Money To Make June IMF Loan Repayment, Faces Default


Greece Doesn't Have Enough Money To Make June IMF Loan Repayment, Faces Default

Greece's interior minister said on Sunday that the struggling European country cannot make debt repayments to the International Monetary Fund (IMF) next month unless it achieves a deal with creditors. The comments are the more clear remarks yet from Athens that default may occur.

With poor credit and a new government shutting the country out of bond markets and with bailout aid locked, the cash-strapped state has been scraping the coffers to meet debt obligations and to pay wages and pensions.

It has already started seizing cash in an effort to stay solvent.

After four months of talks with its euro zone partners and the IMF, the anti-establishment Syriza government is still looking for a deal in order to release up to $7.9 billion in remaining aid, in order to avert bankruptcy.

"The four installments for the IMF in June are 1.6 billion euros. This money will not be given and is not there to be given," Interior Minister Nikos Voutsis told Greece's Mega TV.

Voutsis was asked about his fear of a 'credit event', a term covering scenarios like bankruptcy or default, should Athens misses a payment.

"We are not seeking this, we don't want it, it is not our strategy," he said.

"We are discussing, based on our contained optimism, that there will be a strong agreement (with lenders) so that the country will be able to breathe. This is the bet," Voutsis said.

He went on to say that the last four months Athens has managed to pay public sector salaries, pensions and dues to the IMF by taking 14 percent of national output, doing "remarkably well" for an economy that doesn't have access to money markets.

"At some point we will not be able to do it and at some point we are going obviously to have to make this choice that no minister of finance should ever have to make," Varoufakis said.

A Greek default would likely lead to its withdrawal from the European Union and could hasten the exit of other Eurozone members such as the United Kingdom.

Read this next:

Must Read