Greek parliamentary speaker announced that Greece will not pay IMF on June 5, if a deal is not reached by then with European creditors.
- Policy negotiation is heating up as Greek coffers run dry and it faces another € 1.9 billion in May towards IMF, first tranche of €300 million is due on June 5.
A bailout extension of four months which was done at end of February is nearing and is scheduled to end in July.
Doubts remain, if Greece is struggling to make IMF payment of € 1.9 billion in June, how it will be able to repay European Central Bank € 7 billion due in next few months.
Both sides of negotiations are playing with fire since spillover and confidence damage would be too large if Greece choose to default on IMF loans.
- Defaulting on IMF loans might mean that IMF would no longer be like to be part of Greece Drama as European creditors ignored its prescription of debt write off in both 2012 and now.
- Moreover IMF might choose to withhold from paying its share of € 3.6 billion in last remaining tranche of € 7.2 billion.
Whatever the outcome be, negotiation is moving into critical stage and as of now according to European council spokesperson no deal is at sight in spite of improvement.
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