Ex-IMF rep explains how Greece dodged May default

Ex-IMF rep explains how Greece dodged May default

Greece’s former representative at the International Monetary Fund has revealed how a call from Bank of Greece Governor Yannis Stournaras in May triggered the process by which Athens tapped its reserves at the Fund to avoid defaulting on the Washington-based organization.

The government at the time used around 700 million euros, denominated in Special Drawing Rights, a basket of international currencies, in an IMF holding account to pay the Fund on May 12.

Greece’s IMF representative at the time, Thanos Catsambas (photo), revealed in a blog post that the possibility of using this money to pay Greece’s debt obligation to the Fund was examined after Stournaras, rather than then finance minister Yanis Varoufakis, called him on May 7 to explore this particular option. Stournaras made the call after holding talks with then deputy prime minister Yiannis Dragasakis and deputy foreign minister Euclid Tsakalotos.

Catsambas said he was told by IMF officials that Greece’s reserves could be used for this purpose, paving the way for the payment to be made. However, this only staved off a default for a few weeks as the government failed to make another payment to the IMF at the end of June.

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