Greece’s debt has grown over the last years and that is why British newspaper The Guardian published the following diagrams in order to determine how much money does Greece owe and to whom. The coming months are crucial for the country. Even though last month’s installments to the IMF were paid, the country now has to pay more installments to the IMF, the ECB and treasury bills that are much higher than previous months. The following table shows each month’s installment until the end of the summer. The second table shows that if Greece manages to pay the summer months’ installments, then the next months will be more manageable, economically. In fact, in November, the country will not have to pay any installments, while September, October and December are not as binding. Furthermore, Greece will also be faced with the responsibility of covering public sector salaries and pensions for April, which amount to 1.7 billion euros. The government is seeking money from domestic borrowing, while Greek Finance Ministry officials noted that they would have to take money from all available state funds in order to pay salaries and pensions. Economists are very skeptical about whether the Greek funds have any money left. Paolo Pizzoli, senior economist at ING in Milan, commented: “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 know how much money the country has now available, but I suspect that there is not much left in the coffers.” Meanwhile, a Bruegel think tank representative argued that “Greece has financial assets it can fall back on. The most up-to-date data, from September 2014, showed the Greek government had assets worth €86.6bn.” What is happening at Greek banks? The Greek economy’s main problem are the continuous withdrawals from deposit accounts. The outflows between December 2014-January 2015 reached 25 billion euros, according to the latest data, while in March they showed a relative decline. Gabriel Sterne at Oxford Economics consultancy commented: “The big surprise, if anything, is that 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.” At the moment, Greek banks are operating thanks to the ELA provided by the ECB, but this is a measure that cannot hold for long. Therefore, Stern added that “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.” On the other hand, HIS’ Diego Iskar noted that the Grexit risk is increasing by the day. “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.”
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