Friday 05 June 2015 3:53 am

European markets tumble on Greek IMF payment delay

European markets reacted badly to the news that Greece has been given the go-ahead to bundle a €300m (£220m) payment due to the International Monetary Fund (IMF) today into one large payment at the end of the month.

The FTSE 100 was down 0.43 per cent in early trading, while France's Cac was down 0.77 per cent and Germany's Dax was down 0.74 per cent. Meanwhile, the euro dipped as low as 1.1185 against the dollar, although it later rose to 1.1266.

Across the pond, the Dow closed down 0.94 per cent, while the S&P 500 fell 0.86 per cent.

Greece said yesterday that rather than making three payments over the course of the month, it will bundle €1.6bn on 30 June. The IMF released a statement saying it had precedent.

“Under an executive board decision adopted in the late 1970s, country members can ask to bundle together multiple principal payments falling due in a calendar month. The decision was intended to address the administrative difficulty of making multiple payments in a short period,” IMF spokesman Gerry Rice said.

Greek Prime Minister Alexis Tsipras is due to address his party this morning, and parliament this afternoon.

This morning Greek economy minister George Stathakis told the Today programme that the country "cannot" accept new austerity proposals tabled by its lenders. Primary budget surplus targets continue to be the sticking point: a document leaked yesterday showed Greece had requested a target of 0.6 per cent this year, rising to 1.5 per cent next year. The IMF's proposals, meanwhile, show a target of one per cent.

"We have a mandate from the Greek people to go on, to try to change the terms of the agreement," he said. But he added that the country would do everything it could to avoid a so-called Grexit.

"Greece has to remain in the euro, otherwise we do not have any mandate to take action."