IMF Warns No Leeway on Payment as Merkel Urges Greece to Bow

Bloomberg reports:

International Monetary Fund chief Christine Lagarde said Greece won’t be given a grace period if it fails to make a payment at the end of the month as Chancellor Angela Merkel said there’s still time to reach a deal on aid.

Lagarde, whose policies were labeled “criminal” last week by Prime Minister Alexis Tsipras, said that Greece will immediately be considered in default unless it pays about 1.5 billion euros ($1.7 billion) due to the fund on June 30.

“It will be in default -- it will be in arrears vis-a-vis the IMF, yes, on July 1,” Lagarde said at a press conference in Luxembourg where euro-area finance minister were meeting on Thursday to discuss the deadlock over Greece. “I hope it’s not the case, I really do.”

Greece’s bid to obtain aid and shore up its position within the currency union is going down to the wire, with its euro-area bailout agreement expiring in less than two weeks, the same day the IMF payment comes due. Irish Finance Minister Michael Noonan said the Luxembourg talks could prepare the ground for more in-depth discussions when European leaders meet in Brussels next week.

The great moments of Keynesian economics.