Greece officially in default, but no immediate consequences, says euro zone stability fund

Women hold a Greece flag during a pro-Greece protest in front of the European Union office in Barcelona, Spain on June 29, 2015.  PHOTO: REUTERS
Women hold a Greece flag during a pro-Greece protest in front of the European Union office in Barcelona, Spain on June 29, 2015. PHOTO: REUTERSPHOTO: REUTERS

BRUSSELS (AFP) - Greece is officially in default but the declaration will have no immediate consequences, the euro zone's stability fund said in a statement on Friday.

The European Financial Stability Facility (EFSF) declared "an event of default by Greece", but added that it had "decided not to request immediate repayment of its loans nor to waive its right to action".

The EFSF, which helps support euro zone countries in difficulty, handles the debt owed by Greece to euro zone governments and holds outstanding Greek loans of €144.6 billion (S$216 billion).

EFSF boss Klaus Regling said the body was "Greece's biggest creditor".

"This event of default is cause for deep concern," he added, ahead of Sunday's referendum on Greece's bailout package.

"It breaks the commitment made by Greece to honour its financial obligations to all its creditors, and it opens the door to severe consequences for the Greek economy and the Greek people.

"The EFSF will closely coordinate with the euro area Member States, the European Commission, and the IMF on its future actions."

Greece has in total borrowed €240 billion from a series of lenders, including the International Monetary Fund, the European Central Bank and European governments.