Greece Fails to Make 1.5 Billion Euro Loan Payment

Greece has officially failed to make a loan payment to the International Monetary Fund (IMF).

On Tuesday, Director of Communications at the IMF Gerry Rice confirmed that Greece has in fact defaulted on their loan payments.

“I confirm that the SDR 1.2 billion repayment (about EUR 1.5 billion) due by Greece to the IMF today has not been received. We have informed our Executive Board that Greece is now in arrears and can only receive IMF financing once the arrears are cleared,” said Rice. “I can also confirm that the IMF received a request today from the Greek authorities for an extension of Greece’s repayment obligation that fell due today, which will go to the IMF’s Executive Board in due course.”

The Greek financial assistance program of the European Financial Stability Facility (EFSF) expired late Tuesday evening—midnight CET—and as a result, the country’s financial assistance program will be cancelled.

“It is regrettable for Greece that the EFSF programme will expire today without any follow-up arrangement and that the positive results of the programme are put at risk. Due to the economic policies adopted under the EFSF programme, the country was on a good path towards strong growth until the second half of 2014. The many sacrifices which the Greek people had to make were paying off. Greece managed to cut its budget deficit and regain competitiveness. The country was able to access financial markets again and saw its high unemployment start declining,” commented Klaus Regling, CEO of EFSF.

The financial assistance program for Greece was originally established back on February 21st, 2012. The original end date of the program was slated for December 2014, but was extended twice as requested by the Greek government.

The assistance plan included 48.2 billion euros to cover the costs of bank resolution and recapitalization. A total of 130.9 billion euros was left outstanding from the loan, making Greece the largest creditor by far in the EFSF. Originally, 10.9 billion in financial assistance was not needed and sequentially returned to the EFSF, but as a result of the missed payment, Greece will no longer have access to this large sum of money.

The flow of cash in Greece has become stagnant over the last couple of days, as bank account withdrawals have been limited for Greek citizens.

Tourists in #Greece holding foreign accounts will have no problems with money transactions and will be able to use their credit/debit cards.

— Visit Greece (@VisitGreecegr) June 30, 2015