After defaulting on its payment to the International Monetary Fund (IMF) at 1:00 am on Wednesday, Greece became the first developed country that failed to meet its financial obligations to the Fund. Greece has officially joined Zimbabwe, Somalia and war-torn Sudan as one of the countries that defaulted to the IMF. It is also the first Eurozone country that has done so. Greece’s inability to pay the 1.53-billion-euro loan tranche due to the fund on June 30 generated reactions in Europe and the U.S. However, Greece is not officially bankrupt. The payment is not considered overdue at least until Monday. The IMF procedure dictates that the Managing Director must officially notify the Board of Directors within a month. Christine Lagarde will do so immediately, according to reports. After the Board is notified, Greece will be given a 30-day period to settle the payment. However, the country will be charged interest on late payments and is threatened to lose its voting right in the Fund. The IMF has the right to expel Greece only if the country fails to make the payment after 24 months.
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