Greece Puts Off IMF Payment, Debt Deal Still In Limbo

Despite months of negotiations, Greece has been unable to secure its much-needed next installment of bailout funding. The nation has been struggling to stay afloat financially; its loan repayment to the International Monetary Fund came due on Friday, but Athens put the payment off in order to buy more time as debt talks with the EU drag on.

However, the two sides appear to be stuck in a stalemate with just days to go until Greece runs out of cash and a Grexit becomes a very real possibility.

Tsipras Stuck

Greek Prime Minister Alexis Tsipras has been caught between a rock and a hard place throughout the debt negotiations as he was elected into office on promises to end the nation's unpopular austerity cuts.

Tsipras has already reversed many of the cuts made by the nation's previous government in exchange for bailout funding, making his credibility with lenders questionable.

EU lenders say Greece must show commitment to financial reform in order to receive the funds, something Tsipras has been unable to promise.

Related Link: Despite Warnings About A Grexit, Investors Remain Calm

Don't Bite The Hand That Feeds You

Over the weekend, EU policymakers warned Tspiras and the ruling Syriza party not to reject the offer extended by the nation's creditors this week, as it will likely be the last.

On Sunday. French Prime Minister Michel Sapin upped the pressure on Athens saying that an agreement would have to be made before the end of the month, otherwise there would be no deal at all.

EU officials have said that their latest proposal represents their last effort at reaching a compromise, and that only minor changes would be accepted. In a newspaper interview published Sunday, European Parliament President Martin Schulz warned Syriza leaders against "turning down the hand held out to them" saying that "time is running out and the consequences would be dramatic."

What Does The Future Hold?

The coming days will give markets a good indication as to whether or not Greece is headed for a default.

Although time is running out, both sides have made it clear that a Grexit wouldn't be in anyone's best interest, so a deal is still expected. However, if Athens remains unresponsive to the EU's latest proposal, it could be a sign that more turmoil is to come.

Image Credit: Public Domain
Posted In: EurozonePoliticsTop StoriesMarketsAlexis TsiprasGreeceGrexitInternational Monetary FundMartin SchultzMichel SapinSYRIZA
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