The International Monetary Fund released a question and answer report on Greece’s fate after the nation became, on Tuesday evening, the first developed country to miss an IMF payment.
The immediate implications for Greece are that it cannot receive any further payments from the IMF and the IMF will not approve more money to go to Greece.grace period for missing a a payment and consequently Greece is now in arrears. This will be the situation until Greece pays back its arrears. The Greek government was due to pay back 1.5 billion euros.
“Greece remains a member of the Fund, with voting rights and representation on its Executive Board. The IMF’s annual health check of a member country’s economy (called surveillance) will continue to be an obligation,” the report reads. “For the time being, Greece will also be eligible for IMF technical assistance — that is, access to IMF expertise on a range of economic issues, including tax administration and financial sector policies”.
Yesterday the Greek government requested an extension to pay its debt. The report notes that there is no Furthermore allowing payment postponements is not past of the IMF’s policy.
“More than 30 years ago, the IMF granted a few low-income countries delays at their request, but in each case the delay proved not to help with immediate financing needs or fundamental economic problems,” the report reads.
Greece’s membership in the IMF is not yet at risk. However the report notes that if a country has not paid its arrears within twelve months the other member of the fund can consider that country for “ineligibility”. If Greece does not pay after one year other members can begin to suspend the country’s privileges such as technical assistance, followed by voting rights and in extreme cases can expel that country from the fund.
The report also notes that the other IMF members will not be affected by Greece’s arrear status.
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