Letting Greece delay payment was no solution: IMF

The International Monetary Fund (IMF) has defended its refusal to let Greece delay a payment, contending that agreeing to Athens's request would not have alleviated the debt-burdened nation's distress, Efe news agency reported.

Greece had sought postponement of a payment of 1.5 billion euros ($1.7 billion) that was due on Tuesday.

The IMF declared Greece in arrears after its government failed to make the payment.

"More than 30 years ago, the IMF granted a few low-income countries delays at their request, but in each case the delay proved not to help with immediate financing needs or fundamental economic problems," the Fund said on Wednesday. "The IMF's priority remains helping the Greek people through this difficult period of economic turmoil."

"IMF staff believes that the best way to do this is through the balanced approach... with Greece taking steps to reform its economy and the country's European partners providing additional financing and debt relief," the institution said.

Greece is the first advanced nation to default on an obligation to the IMF in the more than seven decades the Washington-based institution has been in existence.

"There is no grace period. When a member country fails to pay its obligations to the IMF by the due date, it is in arrears," the Fund said.

"The immediate effect is that Greece can no longer receive financing from the IMF under the existing extended arrangement and the IMF will not approve new financing to Greece until it clears its arrears," according to the information posted Wednesday on the Fund's website in a question-and-answer format.

Tuesday marked the final day of the four-month extension of the second financial rescue program for Greece that was agreed on in February by Athens and what is known as the troika: the European Union, the European Central Bank and the IMF.

Talks aimed at paving the way for the disbursement of the remaining 15.5 billion euros of the second rescue broke up in acrimony last Friday.

Without those funds, Greece was not in a position to pay the IMF on Tuesday.