The European Union and IMF will not release an 8 billion euro payment to Greece until after the country has held a referendum on the EU's latest bailout program, a source on the IMF board and an EU source said on Wednesday.
Euro zone leaders last week signed off on the sixth tranche from a 110-billion-euro package agreed for Athens last year, but the sources said the payment was on hold and would not be paid until after the referendum. Without the payment, Greece could face bankruptcy.
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"The board would not want to give money to Greece and then wonder what will happen," the IMF board source said. "The board will want comfort that Greece will fulfill its commitments and right now Papandreou is unable to give that."
The EU source said EU countries had aligned themselves with the IMF and would only make the payment once the international lender had clarity from Greece on its commitments.
"The sooner Greece holds the referendum, the sooner the sixth tranche will be paid. But right now, it isn't going to be paid," the EU source said.