IMF Says It Still Expects Greece to Pay $1.7 Billion Due Tuesday

Summers: There's No Reason Greece Can't Prosper

The International Monetary Fund said it still expects Greece to repay $1.7 billion due Tuesday, as the lender and other creditors struggled to reach a last-minute accord with the nation to keep it from running out of cash.

“Our expectation is that the payment will be made,” Gerry Rice, the fund’s chief spokesman, said Thursday at a regular press briefing in Washington. The fund’s longstanding policy isn’t to extend payment deadlines, and Greece would immediately be in arrears if the money doesn’t arrive, he said.

The IMF’s other deadbeat countries currently include Sudan, Somalia and Zimbabwe, with combined overdue payments of about $1.8 billion.

Given the visibility of the Greek case, IMF Managing Director Christine Lagarde wouldn’t follow fund guidelines that call for a one-month delay until she formally notifies the lender’s board of a missed payment, Rice said. Lagarde can inform the board of developments any time and would notify the board “promptly” if Greece failed to pay, he said.

Lagarde was in Brussels on Thursday meeting with euro-area finance ministers to discuss the latest dueling proposals between Greece and its creditors, including the fund. She told reporters there, minutes after Rice’s briefing, that more work was needed to see if Greece’s proposal could be reconciled.

Earlier this month, Greece deferred four June payments starting June 5 until the end of the month, taking advantage of an IMF rule that had previously been used only once, in the 1980s by Zambia.

Nations that miss IMF payments are ineligible for further funds as long as they are in arrears. The lender’s procedures for dealing with overdue borrowers stretch over two years and culminate in potential expulsion from the fund’s membership.

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