Greece Unable To Make €300 Million IMF Payment, Requests "Bundling"

Tyler Durden's picture

With Greece and creditors unable to come to a compromise on a deal over the past several days, we've said repeatedly that despite claims to the contrary by Greek economy minister George Stathakis, Greece will not make Friday’s €300 million payment to the IMF and will instead request to have the payments bundled so as to buy PM Alexis Tsipras a few extra weeks to negotiate a deal and pass an agreement through parliament. 

Indeed, we said the following on Sunday:

It's quite possible the sense of urgency around the negotiations has now eased because, as we mentioned on Saturday, it looks as though Greece can buy a few weeks by opting to "bundle" its June payments to the IMF, something the Greek government has denied (meaning it's probably assured) but which seems increasingly likely especially given cryptic comments like this one from economy minister George Stathakis:

  • STATHAKIS SEES `TECHNICAL SOLUTION' SOON TO MEET IMF PAYMENTS

While it's unclear whether that means the country will find yet another channel by which they can ask creditors to pay themselves back as they did with the IMF last month or whether that's a reference to bundling the payments is unclear, but here's what Stathakis told Corriere della Sera:


"There shouldn't be any neeed [to bundle the payments]"


We shall see. 

And then yesterday following the latest failure to reach a deal:

However, Christine Lagarde was confident as recently as three hours ago:

IMF chief Christine Lagarde said Thursday that she was "confident" that Greece will make a key debt payment on Friday, as the country mulls a new proposal from official creditors.

 

Lagarde said the proposal offered by European creditors in talks Wednesday, with revised performance requirements for the Greek government, "clearly demonstrated significant flexibility on the part of the institutions."

Needless to say, we were rather skeptical when she said it:

Now may be an opportune time for Lagarde to update everyone her "confidence" level, because moments ago, what we knew was inevitable, was confirmed:

  • DJ GREECE SUBMITTED A REQUEST FOR BUNDLING JUNE IMF PAYMENTS INTO ONE -- GREEK GOVERNMENT OFFICIAL

And Reuters:

Greece has asked to bundle its four debt payments to the International Monetary Fund that fall due in June so that it can pay them in one batch at the end of the month, Greek newspaper Kathimerini reported on Thursday.

 

The request is expected to be approved by the IMF, the newspaper said. That would mean Greece does not have to pay the first tranche of 300 million euros that falls due on Friday.

 

Greece faces a total bill of 1.5 billion euros owed to the IMF over four installments this month.

And just like that, after effectively defaulting to the IMF a month ago, Greece has just re-effectively re-defaulted to the same IMF on its payment due tomorrow, which now will not be made, just as predicted.

Then, adding to the confusion, Greek PM Tsipras tweeted some token statement which for some inexpicable reason had a photo of himself in the tweet:

All of the above of course indicates that Athens has rejected the proposal drafted by creditors on Tuesday and indeed we now have confirmation from the Greek finance ministry:

“After 4 months of negotiations, creditor institutions submitted proposals which can’t solve the riddle of the economic crisis caused by the policies implemented in the last 5 years. The proposals submitted would deepen poverty and unemployment”

 

“The agreement and solution which both Greece and Europe so badly need requires the immediate convergence of institutions to more realistic proposals, which will advance economic growth and social sensitivity. Greek government has submitted such proposals”

Just like that, Greece has called the troika's bluff and put the ball back into creditors' court. For their part, Europe expects a re-counter proposal to the troika's original counter proposal by June 8:

The Euro Working Group expects Greece to respond to an EU proposal to conclude the country’s bailout by June 8, according to a person familiar with the talks.

The farce continues.

In any event, with Friday's payment delayed, there are just a few more left.

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prefan4200's picture

Yawn.  Kick the can again.  And again.  And again.... Wake me up when they lose the can.

KnuckleDragger-X's picture

Avalanche coming, so take two steps back and you'll be safe. Can we hurry up and get to the exciting part?

knukles's picture

Bundling.  When Democratic Campaign Contribution Practices Count!

nink's picture

Lend me the money for a hamburger today and I will gladly pay you tuesday

Temporalist's picture

Did he ask Jamie Dimon for the money?  That guy is a billionaire...

Wolferl's picture

Throw those pathetic Greeks out of Europe already. Let them crash hard into the wall. Throw them under the next bus. It´s the only way those Greek deadbeats will learn to lead a responsible life within their means and how to act and behave in a community of first world countries. No mercy, no indulgence for those Greek liars, cheaters and blackmailers. Throw them out.

Bunghole's picture

That sounds like the same rhetoric you used in WWII.

The more things change, the more they stay the same.

 

PartysOver's picture

Yep,  Have noticed that the term "Forth Reich" has started to show up.   Seems Germany wants to control the EU again.  BTW, I have no dog in this fight and really don't care how it plays out just that it plays out without a Hot War.

NoDebt's picture

I'm guessing the Greeks just need some time to take out an auto equity loan on every car in the country.

r101958's picture

They should try to pay with Zimbabweyan dollars. ;)

TruthInSunshine's picture

I just farted and my fart shouted "Greece will make all of its payments not just on time, but early, as will all of PIIGS, Japan is ingood health, and China is seeing massive manufacturing and export growth again."

 

That was a healthy, if delusional, fart.

HamRove's picture

Must've been a long one to say all that. Congratz!

macholatte's picture

 

Ya think there’s a correlation between the Greek Bundle and the EUR/USD 300 pip ramp?

 

The EUR/USD is just climbing up onto the high board and getting ready to make another swan dive into the Greek panic pool.

wash - rinse - repeat

 

 

Tall Tom's picture

BTW, I have no dog in this fight and really don't care how it plays out just that it plays out without a Hot War.

 

How many US Dollars are in your wallet?

 

Have you ever heard of a Credit Default Swap?

 

Have you ever heard of the $1.5 Quadrillion Derivatives Market?

 

Have you ever heard of the term, "Fractional Reserve Banking"?

 

This is how it works...

 

If I am a Banker I only need a FRACTION, a SMALL FRACTION, of collateral on my books to be SOLVENT. The rest I can loan out. That paper, those Accounts Receivable, are DERIVATIVES.

 

Let's suppose that I have been so fucking GREEDY that I have loaned Greece 5% of my total Reserves. So I hold DERIVATIVES, Greek Bonds, promising to pay it back...with interest...HIGH RATES OF INTEREST...because of Greece's Credit problems.

 

Now let's suppose that the law requires me to hold 5% of deposits in RESERVE.

 

When Greece DEFAULTS then I lose THE PRINCIPAL on those bonds thus my Bank becomes INSOLVENT. If a small amount of that collateral...let's say 5%...is invested in Greek Bonds...which I have an incentive to own because of the high rates of return PROMISED...then I do not have 5% in RESERVE anymore because the Bonds become WORTHLESS upon DEFAULT. That is what a DEFAULT DOES!!!

 

But it gets worse in that other Banks have loaned their Capital to me. Now I cannot make the payments as I am technically insolvent. Those Banks, in turn, also become insolvent because of my decisions on what I did with the money which I borrowed from them to loan it to Greece in the first place....so that I can generate a high rate of return on investment for my Bank.

 

Thus THE ENTIRE EUROPEAN BANKING SYSTEM will face a CASCADE of Bank Failures. That mechanism, previously described, has happened.

 

But it gets even worse as US Banks have loaned the European Banks capital, Those European Banks will not be able to make payments to American Banks because the European Banks have become INSOLVENT. In turn we in the United States will also see the shockwave manifest of cascading Bank Failures.

 

The USA is NOT INSULATED from SYSTEMIC FAILURES of this sort. The Credit Collapse of 2008 is a PRIME EXAMPLE of that fact.

 

So we will either BAIL IN the US Banks...WITH YOUR DOLLARS...in order to save THE SYSTEM.

 

Or we print to infinity to try and save THE TOO BIG TO FAIL SYSTEM from IMPLOSION. And that DEVALUES the PURCHASING POWER of those US Dollars that you have in your wallet.

 

Because of GREECE'S INSOLVENCY, in either condition...YOU FUCKING LOSE!!!

 

You have no dog in this fight?

 

How fucking lame and naiive can you fucking be?

 

 

bbq on whitehouse lawn's picture

That all just means those with non-leveraged assets are in a better position then those without. So maybe he is, gasp: Hedged.

Lawn.Dart's picture

That is true unless you are in mega-debt...

like me.

 

dart

Tall Tom's picture

No. Anyone and everyone, including those holding more Dollars than tangible assets, are in mega-debt...like me.

 

In fact just what is your share of the National Debt? How many claims are there on the titles on any properties which you may think that you own?

 

Since there are 15 times as many derivatives as there is the tangible assets to back them then you can bet that there are 15 claims on what you believe you own outright.

 

And if you believe that your property itle is secure? Guess again. Who are you going to sue? Your bankrupted Title Insurance Company who failed to do their job?

 

A Derivatives implosion will affect EVERYONE....including the Ultra Wealthy.

wiser's picture

big bank buys Greek bonds with 5% own money and 95% ECB money... so if a bond costs 1 billion big bank pays 50 million own money and borrows 950million air money from the ECB... what happens to the big bank if Greece defaults? The bank has to find the 95% loaned from the ECB (950million) to pay back the ECB... big bank is about to fail or enforce bail in when all of a sudden the Greek government steps in and offers to buy the bonds from big bank by taking out a loan (air money) from Troika for the Greek people to have to pay the next 50 years through taxation... the president of Big bank comes to Greece to personally thank the IDIOT leader who saved his bank...

Tall Tom's picture

Well that is if there is still FAITH, TRUST and CONFIDENCE that the Greek Leader will make good on his promises to reform and follow through with the terms andconditions of the contract AND...

 

...that the following future Greek Leaders will make good on their promises...FOR THE NEXT FIFTY YEARS.

 

Now personally I would not have much faith, no trust at all, or any confidence that the Greek Leadership will follow through, or their antecedents will follow through for the next FIFTY YEARS. And I am rather REASONABLE in this postulation as Political whims are rather DYNAMIC.

 

Currently the Greeks have demonstrated that they will now follow through as they are both unwilling and unable tomeet the terms and conditions set even one month ago.

 

So if I were the Big Bank Lender then I would be very hesitant to loan to proven deadbeats. I'd pass the buck and say. "Let somebody else do it."

 

Thus the entire SYSTEM IMPLODES when there is a lack of Faith, Trust and Confidence.

 

Can you say WORLD CREDIT FREEZE II?

 

Oh am I waiting for September...

 

At times raising Interest Rates can have an affect that an institution is in trouble and is no longer worthy of receiving loans. That is a hint of a Bank's INSOLVENCY and is an UNINTENDED CONSEQUENCE of any Financial entity raising Interest Rates in order to strengthen its financial position.

 

This is why the Pound was devalued against the Mark and why there was a run on the Bank of England which made one George Soros very, very wealthy in the 1990s.

 

 

petkovplamen's picture

Germany ALREADY ARe controlling the EU. And I have been saying this for a while now: If Hitler is around today he will smile and shake Merkel's hand and tell her: " I didnt manage to conquire Europe yet you managed without firing a single shot! Well played!"

Mae Kadoodie's picture

I just got off the phone with my bank, I requested my mortgage and my car payments to be bundled till the end of the year.  I'll keep you guys posted on what the reply is.

Tall Tom's picture

You only requested till the end of the year? Small thinker.

 

I asked that they be bundled to the end of the Decade.

 

 

Just what is a Balloon Payment anyway?

 

It was just some fraudulent means of qualifying a Sub Prime Loan initiate before the last bust.

 

Just roll it over...until you cannot. Financial implosion and ruin is the end result of that trick.

Au_Ag_CuPbCu's picture

You only requested till the end of the decade?  Small thinker.

I asked that they be bundled to the end of the millennium.

Tall Tom's picture

LOL

 

And the end result?

SeattleBruce's picture

"I just got off the phone with my bank, I requested my mortgage and my car payments to be bundled till the end of the year.  I'll keep you guys posted on what the reply is."

Keep us posted!  The sovereigns have central banks, bully pulpits, a fawning press and an ignorant public, before they even dial.  What have you/we got?  We need a PR department and some politicians in our pockets...wonder how much that'll cost us (starting with our souls...)?

Perfecthedge's picture

The next time (after all this is over) WWII will sound like a sweet, sweet kids party to Germany. These Fuckers will eat their Euros for breakfast, lunch and supper. By the TRILLIONS.

Let Douche Bank implode and you will see the Fourth Reich failling like the 3 Reichs before...the 1000-Years Reich only lasted 12 fucking years. The next Reich will be over, faster than your grandmother could fart!

cherry picker's picture

And Washington DC isn't full of lying, cheating, blackmailing thieves and murderers?  That is first world.  The Greeks just aren't slick enough yet.

Bush Baby's picture

Bill Gates could bail these clowns out for 5 years.

All this drama over chump change  - 

Tall Tom's picture

You do not get it...

 

Why should Bill Gates bail them out? That would set a very bad precedent. The FED can bail them out of the whole fiasco with ease.

 

But then they'd just repeat the process...

 

But you do not understand the implications of this.

 

Watch the following video and imagine that the Dominos are Banks...

 

The mechanism is described in a previous post on this thread.

 

https://www.youtube.com/watch?v=y97rBdSYbkg

 

Think of that tiniest domino as the DEFAULT of the Greek Bond.

 

It was one Bank in France, Penzias, in 2007, if i recollect correctly, that began the cascading failures that led upto the entire World Market Credit Freeze of 2008.

 

You can deny that it can happen if you want, if it makes you sleep any better. But the sad truth is that the denial will not change the reality as there is evidence to the contrary.

willwork4food's picture

The obvious question is why they were allowed to join the EU in the first place. Since Goldman Sachs managed their paper entry i can only imagine their ultimate plans, but we all know they can't be good. Even the BIS has stated publically that the worlds central banks are in dire straights. Ron Paul, Rand Paul, Paul Craig Roberts have all called for the insanity of the FED to end. And it will. The BIS will maintain global order with a collection of strong currencies including gold and silver. The Bankers will be villified, and Rand Paul will ascend to presidency. But only after the shit hits the fan all over the world with people dying, looting and starving before they move again, and the people will beg for it. Greece will be the reason, and the central bank's greed the motive. The perfect scapegoats, the perfect plan.

There's a reason the military is conducting Jade Helm at this point in time.

Tall Tom's picture

Do you think that this was a Financial strike against the EU in the first place?

 

Are you suggesting that GS was concerned that the Euro was going to compete against US Dollar hegemony?

 

So are you postulating that GS set up Greece to be the fly in the ointment to bring Europe down?

 

Now I am not in disagreement...at all. I wish that I could be.

 

But the unintended consequence of that, if true, is that GS will also implode the entire God damned world. What in the hell were they thinking?

Lea's picture

How old is that dude or girl Wolferl again? Twelve?

Arius.'s picture
Arius. (not verified) Wolferl Jun 4, 2015 12:27 PM

psycopath - get some help

NoDebt's picture

@Wolferl:  I've decided I'm going to be your lone up-vote from now on.  Only because you are so consistent, not necessarily because I agree with you.

walküre's picture

getting this sneay suspicion that Wolferl is MDB's cousin twice removed...

NotApplicable's picture

I'm holding out for proper emphasis, including exclamation points.

Jumbotron's picture

"Throw those pathetic Greeks out of Europe already. Let them crash hard into the wall. Throw them under the next bus. It´s the only way those Greek deadbeats will learn to lead a responsible life within their means and how to act and behave in a community of first world countries. No mercy, no indulgence for those Greek liars, cheaters and blackmailers. Throw them out."

 

You know.....I'm actually starting to lean that way a bit.  I mean, they didn't have to run their country into the ground with debt and then run to their E.U. butt buddies for a bailout.  Shit or get off the pot, Greece.  Go ahead and leave the E.U. if freedom is so important to you.  Otherwise, pay back the fucking debt.

Or ask your Greek compatriot Jamie Dimon.  He's a Greek billionaire.

bid the soldiers shoot's picture

but 

is it not the case by asking for the payments to be bundled, the Greeks push the payment date down to the end of June and maintain their vote/veto in the EU?

This also coincides with the time that the EU sanctions on Russia expire unless they are unanimously extended.

Is there any doubt that Russia is consorting with Greece about paying the IMF?

2+2 = 4 and not 5.

anonnn's picture

Moarfail

The fact[?] that "bundling" enables full EU membership rights, re voting on sanctions, is a demonstration that world-class thinkers are at work.

The Greece situation is not at all some chess-savvy game. Chess has absolute rules that are fully transparent and also a transparent referee with total authority.

In real life, there is no absolute set of rules, nor transparency nor referee. In fact, there is insanity, schizophrenia, conflicting commands and, well... endless loop spinning aimed to produce moarfail.

Moarfail can only be handled by stepping outside the boobytrapped homosap-mind and, somehow, bypassing the moarfail track.

Unfortunately, I do not know how to do that.

bid the soldiers shoot's picture

Look, I don't have the foggiest idea whether being in default, temporarily or not, costs a member state it's voting rights.

If it's not specifically mentioned in the rules and by-laws, I'm sure one of the US's toadies will move to deny Greece its vote. From my understanding of it, then an objection by just one country will defeat that motion.

I'm glad not to know.  I have so few brain cells left.

Plus the only things worth knowing are private pieces of information known only by a few. 

The article says that 1.5 billion euros are due at the end of the month.

A pretty insignificant amount for Russia to come up with to end the sanctions.  

 

wombats's picture

WTF were the EU, IMF and other creditors thinking when loaned to Greece or bought their bonds?  If they had 2 functioning brain cells they would have looked at Greek finances before making the loans and seen that repayment was impossible and default inevitable.

Anyone who was stupid enough to make those loans in the first place deserves whatever they get.  They knew (or should have known) it was throwing money down a hole when they made their stupid loans.  Why bail out those idiots who made the loans?  Let them take the loses they so richly deserve. 

giggler321's picture

Wolferl

>>Throw those pathetic Greeks out of Europe already.

Yer but I'd miss my greek olives.  Not the same as the Spanish or Italian flavors.

Wolferl's picture

Tell you a secret. A lot of the "Italian" olives and olive oil is from Greece actually. The Greeks are not even capable to market their own agricultural produce. Shows you how fucked up this country really is.

Mountainview's picture

Greece doesn't pay on time and Schäuble got weak again (for the x time). These are the facts.

Fod's picture

Throw this pathetic troll out of the comments section already.

Perfecthedge's picture

HEIL HITLER HERR OBERSTLEUTNANT WOLFERL!

I hope the Greeks take you down with them.  You will go so down...World War II will feel like a Victory!

 

Guentzburgh's picture

Hilariious, Germany owes Greece between 280 - 300 billion Euros WW2 gold loan and unpaid reparations, FACTUALLY the Germans are deadbeats and iresponsible, their present behaviour confirms, assinine politicans just too thick to be of any use, luckily rampant immigration into Germany from Afghanistan, Syria, Turkey with the blessing of Merkel should bring some fresh thinking into Germany :)   We watch amuzed as another German Imperial scheme collapses over Germany  

cherry picker's picture

They should call Creflo Dollar.  He has this money thing aced.