- Greek government to withhold IMF payments according to the FT
- Prime Minister Tsipras denies preparing for default according to Reuters
- Government funds to run out by end of month
- Default would likely lead to “Grexit” and return to drachma
- EU may not withstand uncertainty surrounding break-up of monetary union
- Concern could trigger derivatives crisis and ‘Lehman moment’
- Like frogs in a pot of water that is very slowly coming to the boil
The Financial Times, citing unsourced “people briefed on the radical leftist government’s thinking” has made the claim that the Tsipras government in Athens has “has decided to withhold E2.5 billion of payments due to the International Monetary Fund in May and June if no agreement is struck”.
The Greek government was quick to deny the claim. “Greece … is not preparing for any debt default and the same goes for its lenders. Negotiations are proceeding swiftly towards a mutually beneficial solution,” read a statement from the Prime Minister’s office.
The Greek government is rapidly exhausting its funding to pay salaries and pensions with no funding from its lenders having been released since July. Another “end of the road” deadline looms – this time the Eurogroup meeting on April 24th. (more…)