Greece opts to bundle its loan payments

ATHENS, Greece – Desperate for time, Greece is taking an unusual step in talks over its bailout program: It will bundle four payments due this month to the International Monetary Fund into one payment on June 30.

The delay is allowed under IMF rules. Yet it shows how Greece is struggling to meet its financial obligations without the rescue loans that have been withheld since last summer, as Athens and its creditors fail to agree on economic reforms.

The move follows the failure of radical left Prime Minister Alexis Tsipras to break the stalemate with creditors at a late-night meeting with European Commission head Jean Claude Juncker and the top official representing Greece’s peers in the eurozone. The talks will resume “within coming days,” officials said.

On his return to Athens, Tsipras told government officials that “extreme proposals will not be accepted by the Greek government. Everyone must understand that the Greek people have suffered greatly over the last five years and some people must stop playing games at their expense.”

Without a deal, Greece will not get the $8.1 billion remaining from its $269 billion bailout fund, which it’s been relying on for five years. Without the money, it will struggle to pay upcoming debts and the country could soon go bankrupt – a possible preamble to a forced exit from the euro and a return to a financial stone age with a devalued version of its old national currency.

IMF spokesman Gerry Rice said Greece’s decision to bundle the payments “was intended to address the administrative difficulty of making multiple payments in a short period.”

Under an IMF rule from the 1970s, countries can ask to bundle multiple payments if they fall within a single calendar month. Not since Zambia in the mid-1980s has a country made the request, according to the IMF.

Still, the request buys some time for the Greek government, which has already scraped the barrel of its finances by forcing local authorities, hospitals and universities to lend it their cash reserves. Its first IMF payment of a little more than $336 million was due today, part of a total $1.8 billion due to the Fund this month.

Greece has bigger payments due to the European Central Bank this summer, and can’t meet them without the rescue money.

For now, Thursday’s IMF postponement does not appear to impact Greek banks’ ability to draw on vital emergency credit from the Greek central bank, as permitted by the European Central Bank.

At an emergency meeting with ministers Thursday, Tsipras called a parliamentary debate for today on the course of the bailout negotiations.