Greece owes money to the International Monetary Fund, the European Central Bank and the European Union following its two bailouts in 2010 and 2012Crunch talks between Greece and its eurozone creditors are under way, but investors are growing increasingly sceptical that the country can reach an agreement on reforms and unlock the aid it needs from international lenders to avoid a debt default.Greece owes money to the International Monetary Fund, the European Central Bank and the European Union following its two bailouts in 2010 and 2012. Athens is waiting for a further €7.2bn (£5.2bn) in rescue funds and without that money it is unlikely the country can pay almost €1bn due to the IMF in early May. Fears are growing that Greece will therefore default, precipitating the country’s exit from the eurozone. Related: Eurozone finance ministers hold Greek debt talks - live updates The Greek government has tried to squeeze money out of a variety of sources for a couple of months now. Capital expenditure has reportedly been trimmed, state payments to third parties have been postponed and reserve funds of public institutions tapped, but with scarce chances to get the relevant data evidence.Furthermore, the ‘running out of funds’ rhetoric has often been used instrumentally to affect negotiations by parties involved, adding to the noise.Bottom line, we, or at least I, don’t now how much money the country has now available, but I suspect that there is not much left in the coffers.Even if the €86.6bn has declined by a dozen or two, and even if not all of the remaining assets could be easily used to pay for obligations, there is still a lot, and much more than the €30bn assets the Greek general government had at the end of 1997 (see chart below).”The big surprise, if anything, is it still remains more of a bank jog than a bank run. It wouldn’t take much, however, for confidence to go and the run to accelerate.”One more turn of the financial screw and Greece would be in capital controls; a terrible symptom of political failure of a six-year attempt to restore sustainability.”The key will be held by the position taken by the ECB: a withdrawal of its support to the Greek banking sector resulting from a sovereign default could be the trigger that decides Greece’s fate in the eurozone.” Continue reading...
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