A sample text widget

Etiam pulvinar consectetur dolor sed malesuada. Ut convallis euismod dolor nec pretium. Nunc ut tristique massa.

Nam sodales mi vitae dolor ullamcorper et vulputate enim accumsan. Morbi orci magna, tincidunt vitae molestie nec, molestie at mi. Nulla nulla lorem, suscipit in posuere in, interdum non magna.

Exclusive – Greece to run out of cash by end-March without new aid -source

REUTERS – Greece is burning through its cash reserves and will not be able to meet payment obligations beyond the end of March at the latest unless it secures additional funds from its creditors, a person familiar with the figures told Reuters on Wednesday.

Athens is locked in a battle with euro zone partners over the future of its bailout programme, which is due to expire in 10 days. Failure to clinch a deal would leave it at risk of bankruptcy, though until now it had not been clear how much time Athens had until state coffers run dry.

Greece will be able to repay a 1.5 billion euro loan from the International Monetary Fund that falls due in mid-March, but the state will struggle to make payments after that despite continuing efforts to minimize cash needs, the person said.

“Greece can cover its needs until mid-March or the latest by the end of March unless it secures additional funding from official lenders,” the person told Reuters.

Athens has repeatedly asked its euro zone partners to be allowed to issue more Treasury bills beyond an existing 15 billion euro ceiling that it has already hit but its request has been denied.

Adding to the pressure, budget data for January showed the state’s finances worsening sharply as Greeks held off on paying taxes ahead of the Jan. 25 general election. That resulted in a 1 billion euro shortfall in tax revenues, 23 percent below the targeted level, putting the country’s bailout target of a 3 percent budget surplus this year in doubt.

Prime Minister Alexis Tsipras leftist-led government has sought to play down cashflow concerns, with ministers saying the state has enough money on hand and refusing to speculate on when it might run out.

Asked at a news conference on Wednesday about the state’s cash reserves, Deputy Finance Minister Dimitris Mardas said: “We are trying to pay our obligations all the time, I don’t have anything else to tell you.”

Earlier on Wednesday, the conservative daily Kathimerini said cashflow projections showed government coffers would start to run dry as early as Feb. 24.

After the March IMF repayment, Athens faces 800 million euros in interest payments in April followed by a major financing hump in the summer, when it has to repay about 8 billion euros to official lenders including 6.5 billion euros to the ECB for maturing bonds.

In addition, Athens also faces a monthly bill of 1.5 billion euros for public sector salaries and pensions, and an additional 1 billion euros a month for social security and healthcare costs.

Shut out of capital markets in 2010, Greece has survived over the past four and a half years on a continued stream of over 240 billion euros in aid from the European Union and IMF.

It broke its four-year exile from bond markets in April last year amid signs that the worst of its debt crisis was over, but the return was short-lived as bond yields rose to unsustainable levels in the autumn when political tensions rose.

(Editing by Paul Taylor and John Stonestreet)

Politics & GovernmentBudget, Tax & EconomyInternational Monetary FundAthens

Read more:
Exclusive – Greece to run out of cash by end-March without new aid -source

Comments are closed.