Even if Greece reaches a deal with international lenders to release a long-delayed 7.2-billion euro installment it will need another bailout of at least 30 billion euros, the numbers show.
Prime Minister Alexis Tsipras and his ruling Radical Left SYRIZA party, with their partner the tiny Independent Greeks (ANEL) have yet to provide a credible list of reforms acceptable to the troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB).
But the 7.2-billion euros would be used mainly to repay previous loans from the 240 billion euros ($267 billion) in two bailouts that began five years ago but failed to make a dent in the country’s staggering debt of 378.1 billion euros, about $421.9 billion.
Even if Prime Minister Alexis Tsipras clinches the 7.2 billion euros ($8 billion) that creditors are withholding, he’s going to need another cash infusion shortly thereafter.
Four months of negotiations have failed to make any headway and a bailout extension will run out on June 30, the same day Greece must repay the IMF 1.6 billion euros ($1.78 billion) in a series of payments due this month.
Greece will need at least 30 billion euros, Nomura International analysts Lefteris Farmakis and Dimitris Drakopoulos told the Bloomberg news agency, because the coming monies aren’t enough to keep the government going, with tax revenues plummeting.
Tsipras says any aid must be on his terms rather than those of governments whose taxpayers have forked out billions in the past five years to keep Greece in the euro.
“Any plausible deal at this stage is unlikely to do enough and it’s unlikely to be the end of the matter,” Simon Tilford, Deputy Director of the Centre for European Reform in London told the agency. “This could just play out again and again.”
Even if Greece gets through August, it faces a financing shortfall of at least 25 billion euros through the end of 2016. That’s likely to worsen as the economy slides deeper into recession and tax revenue shrivels.
It also means Tsipras would have to renege on his biggest campaign promise: getting rid of the troika, which is likely to be giving him orders for some time.
“The dependence on our creditors will remain for two years in the best-case scenario,” Aristides Hatzis, Associate Professor of Law and Economics at the University of Athens told Bloomberg. “Greece is going to need cheap loans for the next two years.”