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Greece Defaults On $1.8billion Loan – Economic Future Uncertain

Greece is officially in default after missing a $1.8 billion loan payment Tuesday to the International Monetary Fund.

 

It is the first major developed economy to miss such a payment.

 

European finance ministers decided Tuesday against extending a bailout program for Greece that would have enabled it to meet its obligation to its creditors. . Greece’s next hope would be for the IMF to agree to a Greek request to extend the loan.

 

Athens also said it could cancel Sunday’s referendum on whether Greeks should agree to more economic reforms and spending cuts in exchange for new loans if creditors agreed to open new talks. The Greek default could mean Greece would leave the eurozone, shaking up European markets.

 

Greece has amassed a huge debt over the last five years. But the government is balking at demands from the EU for more economic austerity. Greece said its citizens have suffered enough with spending cuts and tax hikes that have lowered their standard of living.

 

Greek banks remained shut Tuesday, and its stock market closed.

 

While the country’s economic future remained uncertain, the Greek finance ministry said it would open about 1,000 bank branches across the country to allow pensioners, many of whom do not have ATM cards, to withdraw enough money to get through the week.

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