ATHENS – Greece’s shaky coalition government will pay a 450 million euro installment due the International Monetary Fund on April 9 but is still scrambling to stay solvent while locked in tough talks with international lenders.
Pressure is mounting for the government to make a deal with the troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) which is holding back a 7.2-billion euro installment until more reforms are completed.
On April 8 the Public Debt Management Agency (PDMA) auctioned six-month T-bills to raise 1.4 billion euros, borrowed money to pay another loan on April 14 as the government is getting money from Peter to pay Paul.
In an ominous sign though, the bill was sold exclusively to domestic investors as foreign investors have been scared off. Greek banks bought the T-bills even though they are teetering as well as the government is also borrowing from state enterprises.
That comes as the prestigious think tank the Foundation for Economic and Industrial Research (IOBE) gave an urgent call for the end of political and economic uncertainty.
The Finance Ministry, which said the country would run out of money on April 9 has pushed that back to April 24 when the Eurozone is due to hold its next meeting to discuss the Greek debacle.
“Negotiations are ongoing. We are still waiting for Greece to harmonize its reform list with the three [creditor] institutions,” a spokeswoman for the German finance ministry said on April 8, telling Greece to pick up the pace.
The government on Feb. 20 got a four-month bailout extension but has done almost nothing since then to complete reforms to unlock more aid.
IOBE said there was reason to worry with both sides playing games to get an upper hand in negotiations.
“The forecast for a further major drop in incomes and an increase in unemployment for at least two years [after a rift] is not a risky one. The long-term effects on the next few generations would be serious. The damage to the Eurozone would also be significant, and would likely lead to a closer union among the more competitive economies on the continent,” IOBE said.