Markets await next move

Greece fails to meet deadline for paying debt to IMF

GreeceGreece failed, as expected, to meet its 11pm deadline for repayment of its €1.6 billion (£1.1bn) debt to the International Monetary Fund.

In a statement, the IMF said: “We have informed our Executive Board that Greece is now in arrears and can only receive IMF financing once the arrears are cleared.”

Prime Minister Alexis Tsipras made a later attempt to seek an extension but European ministers dug in their heels and markets will now be on tenterhooks over what happens next.
The failure to meet its debt – the first major western nation to default to the IMF – will heighten the prospect of Greece to leave the Eurozone. Further credit ratings downgrades are expected  and there may be more frantic behind the scenes jostling to save Greece from falling out of the single currency.
However, with eurozone ministers running out of ideas – and patience – they may have to await the result of Sunday’s referendum which Mr Tspiras called last weekend.
Greeks will vote on whether or not to accept the reform proposals put forward by creditors. If they do not, this may well result in Greece exiting the euro currency.
Greece joins a list of poorer states including Sudan, Zambia and Peru who have failed to make their commitments to the world’s “lender of last resort”.

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