Πηγή: WSJ
By Stelios Bouras
July 10 2012
ATHENS--Greece has enough cash reserves to meet the government's operating needs until at least early August and possibly longer, two government officials said Tuesday, despite earlier warnings Athens could run out of money as early as this month that had once again stoked fears of a payments crisis which could risk endangering Greece's standing in the euro zone.
According to people familiar with the matter, further spending restraint, a small EUR1 billion cash injection from the country's international creditors and--most important--indications that euro-zone partners would cover an upcoming EUR3.1 billion bond redemption, have given Greece's debt-laden government just a little bit of breathing space as it holds talks with those creditors on further austerity measures it must take to secure the next tranche of aid from a promised EUR173 billion bailout.
An ongoing T-bill auction program--on Tuesday Greece raised EUR1.65 billion from the sale of 26-week T-bills--as well as money that could be tapped from the country's bank recapitalization fund, suggest the government will have enough funds to cover its outlays until September, when it hopes to receive a EUR31 billion payout from the creditors.
"It is difficult to put a time period on it, but for the next month there is not an issue [of a cash shortage]," a senior government official told Dow Jones Newswires. "Beyond this, there are ways of covering the country's internal funding needs, such as the issuing of treasury bills."
Just a few weeks ago, former Greek Prime Minister Lucas Papademos said Greece's government could face a cash squeeze as early as mid-June and would run out of money altogether by the end of July at the latest.
As the economy stumbles through its fifth year of recession, Greek government revenues have suffered from personal income tax payments dropping due to wage cuts and record high unemployment, while soaring business bankruptcies have weighed on collections of value-added and other taxes. At the same time, contributions to Greece's deficit-ridden pay-as-you-go pension system have tanked as the army of jobless workers grows.
With the country relying on rescue funding provided by the European Union and the International Monetary Fund, government finances have been further squeezed due to the delay of a June aid tranche until September. The delay arose on account of two successive national elections in May and June which prevented a review of the country's bailout program by international creditors needed to clear the way for more assistance to be paid to the country.
A troika of inspectors from the European Commission, the International Monetary Fund and the European Central Bank visited Athens in the last few days to review Greece's stumbling overhaul program, but a report on their findings and reforms progress made so far is not expected until late July.
As a result of this delay, euro zone finance ministers in Brussels over the last two days "extensively" discussed how to help Greece meet its finance needs until the September tranche is paid, a senior Greek finance ministry official said.
"An in-between solution is being sought after. Our first concern is to secure interim financing until the next aid tranche," said the finance ministry official.
Speaking to reporters in Brussels after a two-day meeting of euro zone and EU finance ministers, newly-appointed Greek Finance Minister Yannis Stournaras said he had been given assurances that Greece would get "some kind" of interim funding over the summer to repay the EUR3.1 billion bond held by the European Central Bank maturing Aug. 20.
But he was unclear about whether Greece would also be given cash on top of the EUR3.1 billion to meet funding needs over the summer. "There is a certainty that the needs for August will be covered, at least in terms of the bond," said Ilias Plaskovitis, a senior finance ministry official who was also attending the briefing.
Earlier Tuesday, Greece reported that its state budget deficit narrowed in the first six months of 2012 compared with the same period last year, as lower-than-expected spending that was EUR3.9 billion below target offset a EUR1 billion gap in revenue, the finance ministry said.
The deficit amounted to EUR12.3 billion versus EUR13.1 billion for the same period a year earlier, while the primary deficit for the six-month period came in at EUR3.15 billion as opposed to EUR6.12 billion in the same period a year earlier.
According to people familiar with the matter, further spending restraint, a small EUR1 billion cash injection from the country's international creditors and--most important--indications that euro-zone partners would cover an upcoming EUR3.1 billion bond redemption, have given Greece's debt-laden government just a little bit of breathing space as it holds talks with those creditors on further austerity measures it must take to secure the next tranche of aid from a promised EUR173 billion bailout.
An ongoing T-bill auction program--on Tuesday Greece raised EUR1.65 billion from the sale of 26-week T-bills--as well as money that could be tapped from the country's bank recapitalization fund, suggest the government will have enough funds to cover its outlays until September, when it hopes to receive a EUR31 billion payout from the creditors.
"It is difficult to put a time period on it, but for the next month there is not an issue [of a cash shortage]," a senior government official told Dow Jones Newswires. "Beyond this, there are ways of covering the country's internal funding needs, such as the issuing of treasury bills."
Just a few weeks ago, former Greek Prime Minister Lucas Papademos said Greece's government could face a cash squeeze as early as mid-June and would run out of money altogether by the end of July at the latest.
As the economy stumbles through its fifth year of recession, Greek government revenues have suffered from personal income tax payments dropping due to wage cuts and record high unemployment, while soaring business bankruptcies have weighed on collections of value-added and other taxes. At the same time, contributions to Greece's deficit-ridden pay-as-you-go pension system have tanked as the army of jobless workers grows.
With the country relying on rescue funding provided by the European Union and the International Monetary Fund, government finances have been further squeezed due to the delay of a June aid tranche until September. The delay arose on account of two successive national elections in May and June which prevented a review of the country's bailout program by international creditors needed to clear the way for more assistance to be paid to the country.
A troika of inspectors from the European Commission, the International Monetary Fund and the European Central Bank visited Athens in the last few days to review Greece's stumbling overhaul program, but a report on their findings and reforms progress made so far is not expected until late July.
As a result of this delay, euro zone finance ministers in Brussels over the last two days "extensively" discussed how to help Greece meet its finance needs until the September tranche is paid, a senior Greek finance ministry official said.
"An in-between solution is being sought after. Our first concern is to secure interim financing until the next aid tranche," said the finance ministry official.
Speaking to reporters in Brussels after a two-day meeting of euro zone and EU finance ministers, newly-appointed Greek Finance Minister Yannis Stournaras said he had been given assurances that Greece would get "some kind" of interim funding over the summer to repay the EUR3.1 billion bond held by the European Central Bank maturing Aug. 20.
But he was unclear about whether Greece would also be given cash on top of the EUR3.1 billion to meet funding needs over the summer. "There is a certainty that the needs for August will be covered, at least in terms of the bond," said Ilias Plaskovitis, a senior finance ministry official who was also attending the briefing.
Earlier Tuesday, Greece reported that its state budget deficit narrowed in the first six months of 2012 compared with the same period last year, as lower-than-expected spending that was EUR3.9 billion below target offset a EUR1 billion gap in revenue, the finance ministry said.
The deficit amounted to EUR12.3 billion versus EUR13.1 billion for the same period a year earlier, while the primary deficit for the six-month period came in at EUR3.15 billion as opposed to EUR6.12 billion in the same period a year earlier.
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