Paris---If Greece ends up defaulting on its debt it will look nothing like a court-supervised bankruptcy procedure for a company.
Instead it will likely be an improvised and chaotic process that could end with a messy exit of the euro and even the European Union.
Q: Bankrupt or default?
A: A country can't go bankrupt in the same legal sense as a company, where a court makes the official determination that a firm has stopped making payments and then decides on measures to try to repay creditors.
States can fail to make payments, however. Greece could end up defaulting -- failing to pay interest or principal on its debts.
Ratings agencies like Standard & Poor's do declare countries in default. However, they are more concerned with private creditors, and have indicated they may not automatically declare Greece in default if it fails to make a payment to an official creditor.
Q: When does Greece risk defaulting on its debt?
A: The danger date is June 30. On that date Greece should repay around 1.6 billion euros to the IMF, and there is little chance that it will be able to do so unless it has reached a deal to unlock the disbursement of the final 7.2 billion euros ($8.2 billion) in loans under its bailout programme.
Greece has since 2010 been unable to do what other countries do with their debt: roll it over by borrowing new money on the market to repay bonds coming due. With investors no longer willing to lend to Athens at affordable rates, it was forced to seek an international bailout.
Disagreement between the new radical left government that took power in Greece in January and the EU and IMF has held up disbursement of the final bailout funds.
The Greek state has been using various schemes to pay state workers and suppliers to free up enough cash to repay its international debt, but these measures are practically exhausted.
Eurozone finance ministers are unlikely to approve the disbursement of the funds at their Thursday meeting in Luxembourg.
Time to find a solution is rapidly disappearing as a deal must be approved in several national parliaments, including Germany's.
After the IMF payment on June 30, Greece has another one to the IMF in mid-July worth around 450 million euros.
Grece owes 6.7 billion euros to the European Central Bank in July and August, and must repay 2.0 billion euros in short-term treasury bills coming due.
AFP
