Greece will use its final dollars to pay wages and pensions.
Barring an improbable deal with the EU/IMF before the end of the month, Greece will run out of cash, according to finance ministry officials cited by Reuters. The final 2 billion euros will go to pensions and the civil service.
"This is the last bit of cash that the Greek state has," a senior finance ministry official said.
A payment to the IMF is due May 1 and nearly 1 billion euros are due to the IMF in the first half of the month. EU officials have said there will be no deal until at least May 11.
IMF doesn't officially declare a 'default' immediately after debts aren't unpaid. They have a 30-day grace period. But Lagarde noted yesterday that no developed country has ever had to use it.
"Payment delays have not been granted by the board of the IMF in the last 30 years. And it was eventually granted to a couple of developing countries, and that payment delay was actually not followed by productive results," Lagarde said.
"So while ... all options are available to all countries, it is clearly not a course of action that would actually fit or be recommendable in the current situation. We have never had an advanced economy asking for payment delays. Payment delays are actually analyzed as additional financing granted to that country, and additional financing means additional contributions by the international community, some of which are in (a) much dearer situation than the country actually eventually seeking those delays."
