Greek interior minister says government cannot pay IMF

ANKARA

Greece will not be able to meet payments due to the International Monetary Fund in June, Greek Interior Minister Nikos Voutsis said Sunday.

The €1.6 billion ($1.76 billion) in repayments that must be made to the organization cannot be found, Voutsis said in an interview with the private television station Mega.

The euro dropped sharply against the U.S. dollar in trading Monday, falling from about 1.12 Friday to about 1.09 Monday morning on the news.

Non-payment of IMF loans would not necessarily constitute a full-scale default, nor would it necessarily lead to an exit from the euro for the country.

But it would cause a severe shock to the international financial system, and could lead to the imposition of capital controls -- such controls were imposed in a similar situation in Cyprus in 2013.

Greek officials say that they are close to an agreement with European creditors, and that could unlock €7.2 billion ($7.8 billion) in bailout funds for the country, without which Greece is expected to run out of funds for its banks and public services in June.