Greece failed to make the repayment of an approximately €1.5bn due to the IMF on 30 June 2015 (European time). Gerry Rice, director of Communications confirmed Greece was “in arrears and can only receive IMF financing once the arrears are cleared”. He also said the Greek government requested the IMF grant an extension and that the request would go the IMF’s executive board for consideration. The IMF states on its website it “does not extend payment terms as a matter of longstanding policy.”
The Greek government said it would hold a referendum and Greek voters would decide if Greece should accept the EU conditions and thereby qualify for more loans or back the Greek government position and hold out for better terms from its EU creditors. However, in a leaked letter sent to its EU/IMF creditors on Tuesday the Greek prime minister said Greece was “prepared to accept” a deal set out over the weekend by the creditors as long as there were some small modifications made. Tsipras linked Greece’s acceptance of the terms to a new package of bailout aid that would need to be negotiated. Both the prime minister and the finance minister have indicated they would resign if Greek voters came back with a “Yes”.
According to the BoE Deputy Governor Jon Cunliffe there was no sign of the Greek problem spreading to other countries. “Financial markets are not showing there is contagion or spreading of risks to the periphery… we are not seeing signs of pressure on Portugal, Spain and Ireland.” Spreads have widened this week but not as much as in 2011-12. Portuguese 10-year bond spreads, for instance, reached 2.44 percentage points on Monday, some 0.67 percentage points wider than on Friday. In 2012 they had soared as high as 15.6 percentage points.
Greek banks are closed until 7 July and the amount of money which can be withdrawn is limited to €60 per day.