In the early hours of Friday morning, according to the British paper the Daily Telegraph, five key players in the Syriza government, meeting in the Maximus Mansion in Athens, made an important decision. They decided that the government would not pay the International Monetary Fund (IMF) its debt repayment installment due that day. Apparently, IMF chief Christine Lagarde was caught badly off guard. IMF officials in Washington were stunned.

The Syriza leaders had the money to pay: it had been raked up from various sources, and they had told Lagarde that they would pay. But at the late hour, they decided not to pay but instead “bundle” all the repayments scheduled for June into one payment at the end of June — or €1.6 billion. This was allowable under IMF rules but had only happened once before (Zambia in the 1980s).

The reason that Greek Prime Minister Alexis Tsipras, Finance Minister Yanis Varoufakis, and the other Greek government leaders decided to hold back payment was two-fold.