Greek debt default not an option: IMF

(WASHINGTON) - A default by Greece on its debt obligations is not and has never been an option, a spokeswoman for the International Monetary Fund (IMF) said on Thursday.

A Greek "default is not on the table, has not been on the table," said IMF director of external relations Caroline Atkinson.

"The Greek authorities themselves have repeated that," Atkinson said, adding that European Central Bank President Jean-Claude Trichet had also said a default was out of the question.

The IMF has agreed to partner with European Union nations to provide Greece with 110 billion euros (143 billion dollars) in loans over three years to stave off the nation's financial collapse.

But fears the bailout package will prove insufficient, and that Greece's debt crisis could spread to other struggling European economies and endanger the euro, have caused international markets to tumble.

On Tuesday, the Dow Jones closed down two percent amid fears that Greece's woes could bring down the eurozone's single currency.

Investors are also watching Spain and Portugal nervously.

Standard and Poors last month lowered Spain's long-term sovereign credit rating to AA from AA+, and Moody's warned this week it was placing Portugal's Aa2 government bond ratings "on review for possible downgrade."

The fears have pushed the euro to its lowest rate against the dollar in a year. It continued to fall Thursday, dropping to 1.27 dollars for the first time since March 2009.

The IMF's executive board is to meet Sunday "to act" on the disbursement of 40 billion dollars to Greece.

Atkinson said the lending institution expected to move "very quickly" with disbursement of the loan.