It’s put up or shut time for Greece’s new coalition government which has spent 2 1/2 months of a four-month bailout extension doing nothing, many in the world press believe.
Greece Must Walk The Talk, Soon
Reuters – Hugo Dixon
Greece has two weeks to produce some red meat.
The prospect of a default is off the table for the time being after Yanis Varoufakis, the country’s finance minister, confirmed that Greece would meet a payment to the International Monetary Fund on Thursday. But, with more payments looming, the fear of bankruptcy will be back by the end of April if Greece doesn’t come up with some serious overhauls by then.
Without those, its eurozone creditors will refuse to lend it more money, and Athens will then probably suffer a disorderly default.
Athens has scraped together enough cash to meet the I.M.F. payment, in part by extracting liquidity from quasi state entities. However, the left-wing government has pretty much exhausted its techniques for squeezing blood from a stone.
Meanwhile, it has largely wasted two and a half months in office by lecturing its creditors, sending out mixed messages about its willingness to default and coming up with amateurish overhaul plans.
Yanis Varoufakis arriving for talks in Washington with Christine Lagarde of the International Monetary Fund on Sunday.Greece and I.M.F. Hold Talks on a Crucial Debt PaymentAPRIL 5, 2015
Now the government needs to get serious and — unless Prime Minister Alexis Tsipras is really willing to default — impose vicious capital controls and exit the euro.
Athens’s eurozone creditors are still hanging tough. Although they do not want Greece to enter a spiral of self-destruction and are worried about the fallout it if does, they do not trust what the government says. As a result, the creditors rightly want to see some meaningful actions before they lend Greece more money.
Mr. Tsipras needs to show he means business, by suffering some political cost at home as a result of implementing unpopular measures.
Otherwise, there is a risk that the government will take the cash, continue to speak with a forked tongue and still default in June if it can’t get a new long-term deal to its liking.
Greece’s Cash Crunch Getting Serious
Market Watch – William Watts
NEW YORK — Treasury bill auctions are supposed to be boring and routine, so it isn’t encouraging that Greece’s attempt on Wednesday to sell just shy of a billion dollars’ worth of short-term paper will likely get outsize attention.
Right now, it doesn’t look like investors expect Greece’s auction of 875 million euros of 178-day Treasury bills to fail or for Greece to miss its €460 million International Monetary Fund repayment the next day, said David Rodriguez, quantitative strategist at DailyForex.com, in a note.
But this belies just how nervous the market is right now, Rodriguez and others said. How much on edge? Rodriguez points to this chart:
It shows investors and traders expect the next two weeks as much more uncertain that the coming year.
As deadlines surrounding Greece approach without a clear solution, increased risks could make for increasingly illiquid currency-market conditions as banks remain on the sidelines, he said. That means the euro EURUSD, -0.92% could both rally and fall sharply on headlines.
Beyond this week’s bill auction and the IMF repayment, Greece sees €1.4 billion of short-term Treasury bills mature on April 13, requiring the country to sell more debt to fund that, Rodriguez notes, while another €1 billion in notes matures on April 16.
Greece seems unlikely to default this week, but no resolution to its financial stability beyond next week is in sight,” said Carl Weinberg, chief global economist at High Frequency Economics, in a note.
Bad Gamble For Greece To Miss IMF Payment
The Telegraph – Ben Wright
Thinking about the Greek debt negotiations for too long can make your head hurt. It is therefore good to be clear about what can and can’t be known. Only the Greeks can be sure whether they will make the €448m IMF loan repayment that is due on April 9. Everyone else is speculating.
Last week, sources in Brussels said Greek government representatives had told eurozone officials they were running out of money and couldn’t make the payment. Then the Greek finance ministry said that it could.
On Thursday, a Greek government official told the Daily Telegraph it may have to miss the payment in order to keep public services running and pay pensions.
Late on Sunday night, Christine Lagarde, the head of the International Monetary Fund, said that Yanis Varoufakis, the Greek finance minister, had assured her the Bretton Woods institution would get its money back.
t may well be that Athens hasn’t yet made up its mind about what it will do. We’ll have to wait and see. The Brussels Group (which comprises the IMF, the European Central Bank and the European Commission and was formally known as the troika) may well be adopting the same attitude.
Indeed, the more you delve into the possible repercussions from a failure to pay the IMF, the harder it becomes to second guess what the Greek government will do.
The potential ramifications oscillate between the benign and the cataclysmic depending on the exact sequence of events and how the markets react – one of life’s great imponderables at the best of times. One thing is clear: the Greek government would be taking an absolutely staggering risk.
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