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Greece to “bundle” June payments to IMF. No money or strategic move?

Greece cannot and probably does not want to make the €3oo-million pay to the IMF tomorrow, Friday, June 5th. Thursday afternoon the Bank of Greece submitted a request to the International Monetary Fund asking to be able to bundle all four June payments into one.

Greece’s obligation to the IMF in June sum up into €1.5 billion with the four tranches to be due June 5th (€300 million), June 12th (€350million), June 16th (€560million) and June 19th (€350million).

The option to bundle together tranches to the IMF is perfectly conform with the Funds’ rules, terms & conditions, provided that the payment will be done by the end of the month. Only then the missing of payment is not considered a “credit event”.

The Greek request to the IMF has not been officially confirmed by the Greek government but all Greek media report about it citing “government sources.

However it was the IMF that confirmed the news through its spokesman Gerry Rice,

“Greek authorities informed the IMF that they plan to bundle the four June payments into one. The deadline for the payment is June 30th.”

There has not to be an IMF decision to approve the request.

The Greek decision comes as surprise because since late Wednesday there were some indications that Athens would indeed pay the IMF tomorrow. However after the creditors’ absurd austerity demands handed out to PM Alexis Tsipras by EC President Jean-Claude Juncker last night, triggered an outrage among the government officials in general and the SYRIZA lawmakers and party officials in particular.

I wouldn’t be surprised if Tsipras decided to “bundle the payments” following immense pressure from his own party. Another option is that Greece decided to increase pressure towards its own creditors. It’s not coincidence, that Finance Minister Yannis Varoufakis said today that an agreement will be reached by June 30th. The same date is also mentioned in the Reforms Draft Plan Greece sent beginning of the week to its creditors. The section about Debt Restructuring reads:

Debt Restructuring

Greek government aims at a restructuring of the debt burden for the years to come. According to the reform list, “an optimally legal ans economic solution” should be negotiated together with the European Commission, the European Central Bank (ECB) and the euro bailout fund ESM  until 30th June when it comes to the repayment of Greek government bonds, currently still in possession of the European Central Bank. The repayment of debts to the International Monetary Fund (IMF) is to take place in two phases: In the first phase, the IMF debt should be repaid as planned until 30 June. Subsequently, the repayment of the refinancing of the debt of the country is to be adapted, according to the paper.

Whether Greece was in a position to pay indeed €300 million to the IMF on Friday remains a mystery.

Negotiation talks have been coming and going between Greece’s new coalition government SYRIZA -Independent Greeks and the IMF-EU-ECB-creditors since last February. So far, they haven’t agreed on something specific or even on a program review.

Creditors insist: No review + No new austerity measures = No money.

A bailout trance of €7.2 billion is due, Greece has not received any money from the bailout since August 2014.

PS Odd: Earlier I saw my neighbor’s family, 2 adults, 2 small kids, all carrying lots of  supermarket bags. Even the youngest kid, 4.  “We raided the Supermarket today,” she said. I wonder whether they have a whistle-blower in the Bank of Greece or they had done next week’s shopping..

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8 comments

  1. Bundling of IMF payments to month end puts Greek into good company: Simbabwe did this once in the 70ies.

    Didn’t Varoufakis say:

    .) “soon”
    .) “within the next few days”
    .) “by next weekend”
    .) “by end of May”
    .) “before June 5th”

    and now he always planned for “June 30th”?

    All those Emergency Eurozone Meetings – just for fun?

    The creditors will present the Greek Government a take-it-or-leave-it proposal which will consist in essence of the agreement of February 20th plus a few harsher regulations for compensating the downturn due to the stalemate since February.

    The Troika will provide some flexibility in the pensions area to let Tsipras keep his face. The Syriza propaganda machinery will blow this up to a huge success, just to hide and cover up the fact that the Greek people will face harsher austerity than initially envisioned in the memorandum for Bailout 2.

    Then the humiliating Bailout 3 waits just around the corner…

    • Fact is up to know all your domsday predictions are worth ZERO. The Greek people will be the ones deciding their own future, not a sociopath IMF minion like U

  2. ViertesWindreich

    Chris Fuck off asshole.Leave Greece alone and look after your shitty country

  3. ViertesWindreich

    The creditors will make nothing. They know the oikonomic collapse is inevitable. They try to buy time. Greece can live in its own, Germany not!

    • Greece can live on its own? – The Troika would love that this would be the case, but your government says it cannot and it can only reach a budgetary surplus with more European money.

      No. Greece cannot live on its own. Its government claims to need more money to tackle the “humanitarian crisis”.

      Greece has become the charity case of Europe and is entirely depending on the goodwill of the Troika.

      Greece is under tutelage and tries to pretend to have muscles. Ridiculous.

    • Greece has become the cadgers of Europe and is entirely depending on the goodwill of the Troika.

      Greece is under tutelage and tries to pretend to have muscles. Ridiculous.

    • Giaourti Giaourtaki

      This conspiracy “analysis” is rooting at a strong mistake of the propaganda of “capital flight”, as only 20% of this never happened “bank-run” money left the country and even from this 20% a lot is still on Greek banks, it just went from a Greek office to a office abroad.
      As of 1.2 million unemployed only 100.000 still get allowance one can imagine where this “capital flight” went.