Greece defers IMF payment, Merkel warns crisis is far from over

Greece became the first country to defer a payment to the International Monetary Fund since the 1980s as its game of brinkmanship with creditors goes down to the wire. With Prime Minister Alexis Tsipras getting ready to address parliament on Friday after receiving a list of creditors’ demands, the step underscores the state of the country’s shriveling finances. While international officials have reported some progress in recent days, German Chancellor Angela Merkel said “we’re still far from reaching a conclusion.”

The delay in the payment to the IMF is an escalation of the confrontation. It increases the risk of bankruptcy and Grexit.

Nicholas Economides, an economics professor at New York University

In a sign of accelerating efforts to bridge the remaining differences, Tsipras, Merkel and French President Francois Hollande spoke late on Thursday evening via conference call, according to a Greek government official. Tsipras, elected in January on a promise to end austerity, returned from late night talks with EU officials in Brussels to face an outcry over conditions that would breach the “red lines” his Syriza party has declared. The move comes at a critical time for Greece and its IMF, European Union and European Central Bank creditors, as they push for a breakthrough in four-month negotiations to unlock 7.2bn euros ($8.12bn) in rescue funds Greece desperately needs to honour debt payments.

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