Greece defaults on IMF payment despite last-minute overtures to creditors

Tue Jun 30, 2015 6:54pm EDT
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By Renee Maltezou and Robert-Jan Bartunek

ATHENS (Reuters) - Greece made last-minute overtures to its international creditors for financial aid on Tuesday, but it was not enough to save the country from becoming the first developed economy to default on a loan with the International Monetary Fund.

The left-wing Greek government had asked European partners for a two-year aid package to cover its financing needs. Later on Tuesday, Greece's Finance Minister Yanis Varoufakis indicated on a call with European counterparts that Athens might scrap a controversial July 5th referendum if a deal was reached, according to euro zone sources.

The flurry of diplomacy was an attempt to bring creditors back into talks after five months of inconclusive negotiations brought Greece close to leaving the euro currency bloc.

It came as tens of thousands of people descended on Athens' central Syntagma square over the past 24 hours in two different rallies - one to support the government and the other to push for Greece to remain in the euro.

Greece, as expected, was not able to repay 1.6 billion euros it owed to the International Monetary Fund, in what was the largest missed payment in the Fund's history.

Late on Tuesday, the IMF said it would examine a Greek request for a payment extension in due course.

The latest Greek proposals came too late to prevent Greece's existing aid package - with locked-up funds it needs to pay wages, salaries and debt - from expiring.

Still, in a sign that European officials have not given up on finding a solution for Greece, finance ministers said they would confer on Wednesday over Tsipras' latest loan request, effectively coming back to the negotiating table.   Continued...

Protesters wave and dance under a huge EU flag during a pro-Euro rally in front of the parliament building, in Athens, Greece, June 30, 2015. REUTERS/Yannis Behrakis