Bundling of upcoming Greek IMF payments pushes the ‘hard’ deadline to end-June

Bundling of Greek IMF dues in June sets a hard deadline at the end of the month. Ongoing Greek negotiations with creditors, which had seemed to be approaching 'final' bargaining positions - with notable progress around ameliorating fiscal surplus targets - risked being upset by a Greek decision to bundle upcoming dues to the IMF into one payment at the end of June. 

The move removes near-term default risk while emphasising the parlous state of Greek finances, shifting the focus to the overall bailout expiry date at the end of the month. A softer deadline of the 14th of June - time needed to permit the approval of necessary legislation by Germany's Bundestag - forms an interim hurdle. 

According to Lloyds Bank, "Negotiations around the release of liquidity to meet upcoming payments now appear secondary to broader questions around what happens when the current bailout programme expires. The failure to reach a new overall agreement - or another creative extension - would entail the likely withdrawal of the ECB's ELA facility to Greece and, with a challenging profile for external Greek obligations over July and August, a disorderly Grexit."