IMF to Stop Payments To Greece After Shortfall Is Discovered In Eurozone Bailout Package

Greece
The Greek flag (right) is waving a bit more shakily as monetary problems mount.

The International Monetary Fund will suspend aid payments to Greece unless a 3 billion-euro shortfall can be plugged in Greece’s 172 billion-euro rescue package, according to a Financial Times report.

The gap emerged after the euro zone central bank refused to roll over Greek bonds that it holds, and it comes at a time when the privatization plan is falling behind schedule in Athens.

Unlike previous problems with the Greek bailout package where Athens was to blame, this problem emanates from other euro zone capitals, or “outside pressures,” as officials called them.

European ministers will now be forced to find alternative funding, including the possibility of a fresh bailout program near the end of the year. Ministers will meet in Luxembourg on Thursday evening to discuss the issue, but the IMF has warned that aid payments may have to be stopped in July.

The national central banks refused to roll over 3.7 billion-euro Greek bond holdings when the first redemptions came due last month. This resulted in money being advanced to Greece that was supposed to be due later in the bailout program. 

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