Greece has joined Somalia, Sudan, and Zimbabwe in defaulting on the IMF

It’s official: Greece has defaulted on a $1.7 billion loan repayment to the IMF, earning it the dubious honor of being the first advanced country to stiff the international financial institution, and setting a new record for the size of a missed payment. (Step aside, Sudan.)

At a stroke, the IMF’s “overdue financial obligations” have nearly doubled:

Greece now joins Somalia, Sudan, and Zimbabwe in falling into arrears with the IMF. The IMF’s procedures for dealing with late payers are not the same as a private lender’s, though. The fund will now enact asomewhat convoluted procedure (pdf, p. 139) that features warnings, declarations, meetings of the board, and much else besides.

Credit-ratings firms do not consider a missed payment to the IMF as a bona fide default, and Greece’s other lenders—namely, the rest of the euro zone—are unlikely to call in their loans (as they are now allowed to do) and trigger the immediate bankruptcy of the country. But Greece’s current bailout deal with fellow euro zone states has just expired, taking billions of much-needed euros in potential aid with it. Now, it will need to agree to a completely new deal to unlock further funds.

The IMF’s rules require that it limit contact with Greece as long as the country is in arrears. The fund says a last-minute request from the country—does Athens ever do anything on time?—to extend the payment deadline will be considered “in due course.”

In the meantime, the IMF will hope that Athens and its other creditors can work out their differences. Greece still owes the fund around $26 billion in total, with loan repayments scheduled to come due from next month out until 2030. If Greece can’t get its repayment schedule back on track, that would make the IMF’s difficulties during the 1980s, when at its peak 26 countries were in default and arrears rose above $5 billion at current exchange rates, pale in comparison to the potential damage that just one nation could do to the balance sheet now.

History of IMF defaults

Country Period in arrears
Cuba 1959–1964
Egypt 1966–1968
Cambodia Mar. 1975–Oct. 1992
Nicaragua Feb. 1983–Apr. 1985
Guyana Apr. 1983–Jun. 1990
Chad Jan. 1984–Nov. 1994
Vietnam Feb. 1984–Oct. 1993
Sierra Leone Nov. 1984–Sep. 1986
Sudan Dec. 1984–present
Liberia Dec. 1984–Mar. 2008
Tanzania Mar. 1985–Jul. 1986
Zambia Apr. 1985–Jan. 1986
The Gambia Jun. 1985–Jul. 1986
Peru Sep. 1985–Mar. 1993
Jamaica Apr. 1986–Jan. 1987
Zambia Apr. 1986–Dec. 1995
Sierra Leone Jan. 1987–Mar. 1994
Somalia Jul. 1987–present
Honduras Oct. 1987–Nov. 1988
Panama Dec. 1987–Feb. 1992
Democratic Republic of the Congo Jun. 1988–May. 1989
Haiti Oct. 1988–Sep. 1989
Honduras Nov. 1988–Jun. 1990
Iraq May. 1990–Sep. 2004
Dominican Republic Aug. 1990–Apr. 1991
Democratic Republic of the Congo Nov. 1990–Jun. 2002
Haiti Nov. 1991–Dec. 1994
Bosnia and Herzegovina Sep. 1992–Dec. 1995
Yugoslavia Sep. 1992–Dec. 2000
Central African Republic Jun. 1993–Mar. 1994
Afghanistan Nov. 1995–Feb. 2003
Zimbabwe Feb. 2001–present
Greece Jul. 2015–present

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