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Despite Default, France Wants Greece in Eurozone

Despite Default, France Wants Greece in EurozoneDespite Default, France Wants Greece in Eurozone

Greece has missed the deadline for a €1.5 billion ($1.66 billion) payment to the International Monetary Fund, hours after eurozone ministers refused to extend its bailout.

But the ministers say they will discuss a last-minute request from Greece for a new two-year bailout on Wednesday. Greece is the first advanced country to fail to repay a loan to the IMF and is now formally in arrears, BBC reported.

There are fears that this could put Greece at risk of leaving the euro.

The IMF confirmed that Greece had failed to make the payment, shortly after 22:00 GMT on Tuesday.

“We have informed our Executive Board that Greece is now in arrears and can only receive IMF financing once the arrears are cleared,” said IMF spokesman Gerry Rice.

Rice confirmed the IMF had received a request from Greece to extend the payment deadline, which he said would go to the board “in due course”.

With the eurozone bailout expired, Greece no longer has access to billions of euros in funds and could not meet its IMF repayment.

The European Central Bank (ECB) has also frozen its liquidity lifeline to Greek banks. Meanwhile, ratings agencies have further downgraded the country’s debt.

  No Time for Vetoes

French President Francois Hollande said it was the duty of other eurozone countries as well as Greece to keep the country in the single currency area, adding that now was not the time for vetoes or “intransigent statements” but for dialogue, Reuters said.

“It is our duty to keep Greece in the eurozone. That depends on Greece ... But it also depends on us. As a European I don’t want the dislocation of the eurozone, I am not into intransigent comments, into brutal rifts,” Hollande said.

He did not say who he was referring to but may have had German policymakers in mind, who have made increasingly tough statements on Greece. He may also have sought to pacify the left wing of his Socialist Party, to show he is doing all it can to help Greek Prime Minister Alexis Tsipras.

“I believe we must look for a deal, for negotiation, for reason. But this requires that everybody be convinced of that. France is fighting for that, it does not want vetoes or roughness.”

While German Chancellor Angela Merkel reiterated on Wednesday no negotiations on a bailout were possible before a referendum in Greece on Sunday, Hollande said a deal was required now.

“A deal must come now, it cannot be delayed, we’ve been waiting for so long,” he told reporters. “If it doesn’t happen, if we have to wait for a referendum, there is always a risk ... that we would enter a period of turmoil and enter into the unknown. It’s better to be sure than to leap into the void.”

Financialtribune.com