Deadbeat no more: Greece has repaid its IMF debts… with more borrowed money

No hard feelings?
No hard feelings?
Image: Reuters/Yannis Behrakis
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Greece is out of the international financial dog house. Over the past three weeks, the cash-strapped country has stiffed the IMF twice, missing loan repayments worth around €2 billion ($2.2 billion) in total.

But today the fund confirmed that Greece has cleared its debt—or “repaid the totality of its arrears,” in IMF-speak. This closes a dark chapter in the country’s history, and the fund’s financial statements:

Greece’s initial €1.6-billion default at the beginning of the month landed it in unsavory company, alongside Somalia, Sudan, and Zimbabwe on the list of IMF deadbeats. Greece’s missed payments roughly doubled the IMF’s “protracted arrears,” pushing them to a 20-year high.

It’s not as if Athens is suddenly flush, or found missing billions stuck in the sovereign equivalent of a sofa. After Greece and the euro zone agreed to a new bailout deal last week, European officials scrambled to come up with a €7 billion short-term loan so that Athens could make a big bond repayment to the European Central Bank today, worth around €4 billion, and clear its debts with the IMF. The IMF wouldn’t participate in a new bailout of Greece until overdue payments from the previous one were repaid first.

If this all sounds a bit circular, that’s because it is: