Thursday, January 15, 2015

Greece risks cash crunch if Syriza wins, finance minister warns

by Kerin Hope

Financial Times

January 15, 2015

Athens risks running out of cash to make debt repayments in March if the leftwing Syriza party comes to power, Greece’s finance minister has warned, raising the prospect of a break with international lenders and a chaotic exit from the country’s four-year bailout.

“I’m raising a flag because there is complacency about raising funds to pay our obligations and that complacency is not warranted,” Gikas Hardouvelis said in an interview with the Financial Times.

Mr Hardouvelis was referring to claims by Syriza, which is poised to win a January 25 general election, that Greece could avoid a looming cash crunch by issuing short-term debt for purchase by local banks and drawing on a buffer of treasury reserves.

George Stathakis, the shadow development minister, told the FT last week his party’s economic team saw “no reason to worry” over repaying €4.3bn of debt due in the first quarter. He argued that most of the payment could be covered by reserves with the remainder coming from a top-up issue of short-term treasury bills.

But Mr Hardouvelis, a technocrat who took over last June as finance minister in the coalition government of Antonis Samaras, the centre-right prime minister, stressed that a new administration would face “severe financial constraints” on taking office.

“The timeline is very pressing and the money isn’t there,” Mr Hardouvelis said.


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