Greece is preparing to declare a debt default unless it can reach a deal with its international creditors by the end of April. The government, which is rapidly running out of funds to pay public sector salaries and state pensions, has decided to withhold €2.5 billion of payments due to the International Monetary Fund in May and June if no agreement is struck, they said.
"We have come to the end of the road . . . If the Europeans won't release bailout cash, there is no alternative ," one government official said.
A Greek default would represent an unprecedented shock to Europe's 16-year-old monetary union only five years after Greece received the first of two EU-IMF bailouts that amounted to a combined €245 billion.
The warning of an imminent default could be a negotiating tactic, reflecting the government's aim of extracting the easiest possible conditions from Greece's creditors, but it nevertheless underlined the reality of fast-emptying state coffers.
Six Days to Plan Reform
Last Friday, Greece was given six working days by the technical staff of the Euro Working Group to come up with reform plans ahead of a meeting of euro zone finance ministers (the Euro group) on April 24. Without reforms, a much-needed last trance of aid from the country's extended bailout program will not be released.
Greece has been the recipient of two bailouts since 2010, worth a combined 240 billion euros ($254 billion). The country's second bailout was extended by four months in February by the bodies overseeing its implementation -- the European Commission, European Central Bank and International Monetary Fund (IMF) -- but there has been a distinct lack of progress on the reform front, testing the patience of its creditors, particularly Germany.