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ATHENS – Despite evidence state coffers are fast emptying, Greek Prime Minister Alexis Tsipras insisted there’s enough money to pay salaries and pensions – for now.

He didn’t say, however, if that means other obligations won’t be paid so that the government can take care of its workers and elderly at the same time it’s depleting cash reserves to pay back international lenders who are squeezing him to make more reforms.

“There is absolutely no problem with liquidity,” Tsipras told reporters after a meeting Finance Minister Yanis Varoufakis, who had told Alpha TV: “There is no problem in securing funds for salaries and pensions.”

The denials came as Greece prepared to issue 1 billion euros ($1.1 billion) in three-month Treasury bills on March 18 to meet debt repayments.

The government this week must repay over 900 million euros to the International Monetary Fund and redeem 1.6 billion euros in three-month Treasury bills, To Vima weekly reported.

Greece is locked in talks with the troika of the European Union-International Monetary Fund-European Central (EU-IMF-ECB) and awaiting a 7.2-billion euro installment from what’s left of 240 billion euros ($272.5 billion) in two bailouts that began in 2010.

The beleaguered new government of Tsipras’ Radical Left SYRIZA and his partner, the formerly anti-austerity Independent Greeks (ANEL) have to come up with six billion euros to pay the lenders in March and as the Frankfurt newspaper Allgemeine Zeitung said Greece will have to cut salaries and pensions again.

European Parliament President Martin Schulz also told the daily: “Tsipras urgently needs money.” He met with Tsipras last week and said the Premier has to convince skeptics in the European Union and the ICB he will forge ahead with reforms he had vowed to reject ahead of the Jan. 25 snap elections.

To cover the shortage, the government this week submitted a law that directs the cash reserves on pension funds into state debt purchases insuring the banks get paid first, contradictory to Tsipras’ campaign pledges for more social benefits and to restore slashed pensions.

Financial daily Naftemboriki reported that pension funds have 2.5 billion euros deposited at the Bank of Greece, and another 1.9 billion in private banks with analysts saying the government is scraping the bottom of the barrel and running out of money, belying Tsipras’ confident assertions.

The ECB so far also has granted only relatively small amounts of emergency liquidity to Greek banks that are teetering as customers have yanked out more than 20 billion euros in deposits the last few months, fearing Greece will be forced out of the Eurozone and back to a devalued drachma.

The ECB also won’t let the Greek banks buy more short-term treasury bills, the government’s last hope of getting money to repay other lenders in its Robbing-Peter-to-Pay-Paul scheme.

Greece’s harshest critic, German Finance Minister Wolfgang Schaeuble this week warned that a disorderly “Grexident” — playing on the terms “Grexit” and an accident — that could push Athens out of the euro could not be excluded.

“To the extent that Greece is solely responsible and decides what is to happen, and we don’t know exactly what Greek leaders are doing, we can’t exclude it,” Schaeuble told Austrian broadcaster ORF.

 

Source: The National Herald
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