Thursday, April 23, 2015
At this point, only a miracle can save Greece from disaster
April 23, 2015
The debt-troubled nation must grasp the only lifeline left and negotiate with creditors now to save itself.
The new leftist Greek government is running out of cash fast. Elected on the promise to disburse large amounts to those hurt by austerity, it cannot even pay the regular obligations of the State. Within two to four weeks, Greece will not be able to pay salaries, pensions and loan obligations to the International Monetary Fund and other lenders. The clock is ticking and time is running out. Greece must grasp the only lifeline left and negotiate with creditors now to save itself.
By the middle of May, Greece will need to refinance $3 billion of its Treasury bills. Typically, Greek banks buy most T-bills, but the European Central Bank has placed restrictions on these purchases. As a result, Greece is faced with the burden of covering $756 million worth of new T-bills, as well as repay $836 million to the International Monetary Fund (IMF) on May 11. That’s a total of about $1.6 billion, which doesn’t include paying salaries, pensions and other government expenses.