Late Monday evening the Financial Times reported that the government of Greece is planning on defaulting on International Monetary Fund debt payments in May and June if they are unable to negotiate better terms for their ongoing Bailout Program by the end of April:
“We have come to the end of the road . . . If the Europeans won’t release bailout cash, there is no alternative [to a default],” one government official said.
Since Syriza’s election victory in January, new Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis have been engaged in multiple rounds of negotiations seeking to end austerity measures imposed by the terms of the previous two rounds of bailouts, or at the very least reduce the effects of financial austerity on the citizens of Greece. Their efforts have not yielded results to their benefit as the EU creditor nations and the Troika (which has been renamed “The Institutions”) have stood by their stance that the bailout terms must be met unconditionally.
The report by the FT sent Greek bond yields sharply higher in trading today and, despite protestations from the Greek government that they would proceed to service their international debt, many market participants see the inevitability of default becoming more and more certain:
Investors and analysts are looking to April 24, when finance ministers from across the eurozone will meet in Riga to discuss reforms put forward from Alexis Tsipras, prime minister. Greece has more than €2.5bn due to the International Monetary Fund in May and June, along with expenses for pensions and government employee salaries.
[Financial Times][Reuters][Daily Mail][Photo: Louisa Gouliamaki/AFP/Getty Images]