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Wednesday, April 1, 2015

Greece's urgent talks have stalled without a deal and the cash is running out

Greece will reach agreement with its euro zone partners and the International Monetary Fund on a package of reforms next week, which will help to unlock remaining bailout aid, the country's economy minister said on Wednesday. "The agreement will close on (Greek Orthodox) Easter week," Economy Minister George Stathakis told Skai TV. But that runs against what European Council President Donald Tusk said just one day earlier — on Tuesday Tusk said he didn't foresee any deal before Easter, according to the Guardian. Greece's talks with its eurozone and international lenders have stalled without a deal, while each day that passes brings the country a little closer to a snap default.   Last week Athens presented a list of reforms to its official creditors in a bid to show that it is committed to living up to pledges of financial discipline and is worthy of aid. But the bureaucrats involved in technical talks over the list say that they've seen too little detail, and that there are still too many "red line" areas for Greece. The country negotiated a bailout extension at the end of February, but hasn't provided enough clarity on reforms yet to actually access the money.  Whether the agreement comes before or after Orthodox Easter is a big deal. The government has a major payment to make to the International Monetary Fund on April 9th, just before a four day bank holiday. If Greece can't make the payment or effectively runs out of money doing so, the state might have to bring in capital controls over the extended weekend.  Here's the Wall Street Journal on when Greece will run out of money:  The truth is: Nobody knows. Even Greece. “The liquidity situation is fluid,” some senior Greek officials say. Other Greek policy makers say the piggy bank will be empty by mid-April. In recent weeks the government has tried to meet both its obligations to creditors and domestic payments – above all, pensions and public-sector wages – but it has been slipping deeper into arrears with suppliers of goods and services to the public sector... German officials believe Greek claims of imminent default are a bluff to get bailout aid without meeting creditors’ reform demands. In 2012, German officials point out, Greece was able to keep paying the bills for month after month in a similar situation. But like the boy who cried wolf, it’s also possible that Greece really will run out sooner than creditors expect. All of this raises the possibility of a "Grexident" — an accidental Greek exit from the euro. Any failure to meet payments which reveals that the government is effectively out of cash could cause panic, and the further into April the talks drift, the more likely that becomes. Join the conversation about this story » NOW WATCH: Animated map of what Earth would look like if all the ice melted


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