Monday, June 29, 2015

Greece to Default on $1.73 Billion IMF Payment

Wall Street Journal
June 29, 2015

European leaders appealed to Greeks to vote “yes” in a referendum on their country’s bailout, warning that the risk of Greece’s exit from the euro was real, as Athens confirmed it wouldn’t be able to make a loan repayment to the International Monetary Fund due on Tuesday.

The Greek government’s decision to call a vote on measures its creditors demand in return for more bailout aid has cast the country into uncharted waters. As of Tuesday, Greece will be cut loose from international rescue loans for the first time in more than five years. It will also default on the €1.55 billion ($1.73 billion) IMF payment, whose deadline is the same day.

Many economists and officials fear that without further financial support, Greece may have to abandon the euro, sparking a messy departure from the bloc. The European Union also hopes to avoid contagion from spreading to other parts of the 19-country eurozone after Greece’s decision over the weekend to shut down its banking system for at least a week to prevent money from flooding out of the country.

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