Greece won’t make IMF debt repayment Tuesday

Varoufakis was questioned by reporters as he was entering the ministry. Meanwhile, when asked by the Financial Times if it was correct that Greece won’t be paying, George Stathakis, Greece’s economy minister, replied “correct.”

Pundits note that technically this is not a default, since IMF rules consider a non-payment “arrears”, Greece would join developing countries like Somalia, Cuba and Zimbabwe that have current or former “overdue obligations” to the IMF.

Credit rating agencies have said that non-payment to the IMF is not formally a default, and the ECB is unlikely to decide it means Greece is bankrupt. However, S&P demoted Greek credit worthiness to CCC- status with negative outlook.

If the ECB deems Greece bankrupt, much of the collateral used by Greek banks to obtain emergency loans would be worthless. That would mean the ECB having to cut off emergency funding, probably forcing a Grexit.