Greece avoided an unprecedented default to the International Monetary Fund after raiding an emergency cash account at the Fund, in a major sign the country is edging ever closer to stiffing its senior creditor. Athens tapped €650m from an escrow account held by the Bank of Greece at the IMF, scraping together a further €100bn in cash reserves to avoid going into arrears.
The news came after reports in Spanish paper El Mundo said the IMF was ready to pull the plug on the debt-stricken country. Fund officials reportedly told European finance ministers they had grave concerns about Athens willingness to slash spending, raise tax revenues, and implement a raft of structural reforms, ruling themselves out of a fresh rescue which could be worth €30bn-€50bn. Seems like they are going to have to do what I said almost 5 years ago at the start of this, and that is to start issuing a local currency that is put into circulation by government spending, as long as that local currency cant be traded outside the country then it wont have much impact on the rest of us, it does mean that almost every euro the country earns will go towards paying of debt, so Greece will become a country that will become euro hungry and should offer the rest of us great holiday deals... Speaking in Brussels, the president of the eurogroup Jeroen Dijsselbloem said there would be no discussions over another programme for Greece until an agreement on its current deal is reached.
The latest meeting of finance ministers gave way to little substantive agreement on unlocking vital bail-out funds for Athens, but was conducted in a more "constructive" environment, said eurozone economics chief Pierre Moscovici. Greece's finance minister Yanis Varoufakis warned his country now faced an "urgent" liquidity situation.
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