Greece will not meet a 450 million euro ($496.7 million) loan repayment to the International Monetary Fund that falls due on Monday given its severe cash crunch, two sources close to the issue said.
The missed payment will follow a 1.6 billion euro payment to the IMF which Greece also missed paying last month, making it the first advanced economy to ever be “in arrears” with the fund – the IMF’s official euphemism for default.
The head of the debt agency, Stelios Papadopoulos declined to comment.
With Athens short of cash and with no bridge financing to tide it over, the government did not have sufficient funds available to make the payment on Monday, the sources said.
Last month Greece asked the IMF for a last-minute repayment extension which the fund has said would be considered in “due course.”
The IMF, which has funded part of Greece’s 240 billion euro bailouts, has said Athens may receive further funding once its arrears are cleared.
Including the IMF payment, Greece faces debt payments of 8 billion euros this month to redeem maturing government bonds, short-term T-bills and meet interest on government paper and loans.