The Greek government has just over two weeks, until April 8, before it enters a “critical” situation and cash runs dry in Athens.
That’s according to Frankfurter Allgemeine Sonntagszeitung, the Sunday edition of the respected German newspaper. The paper says it’s seen European Commission estimates that suggest even if Athens taps state-owned enterprises and social funds for money, it has a €465 million ($US502.1 million) payment to make to the International Monetary Fund on April 9 that it will struggle to make.
It’s a moving estimate — if Prime Minister Alexis Tsipras, or finance minister Yanis Varoufakis find some clever way of delaying payments or shuffling funds around, it could be pushed back. But that’s not much of a long-term solution. The prospect of running out of funds entirely is now looming.
The government is trying to unlock the extension to its own bailout agreement that was provisionally negotiated in late February. But Athens won’t get the €7.2 billion ($US7.78 billion) unless it presents a new reform list with more detail on the government’s plans, and shows some indication that they are actually beginning.
PM Tsipras is in Germany today for his first official visit to Berlin, where he’s meeting with Chancellor Angela Merkel.
And the Financial Times has a copy of a letter sent from Tsipras’ office to Merkel, showing how strained relations have become. Here’s a snippet:
I also regret to report that little progress has been made in the negotiations between the technical teams in Brussels and Athens. The reason for the extremely slow progress is that the institutions’ technical teams, as well as some of the actors at a higher level, seem to show little regard for the 20th February Eurogroup agreement and are, instead, committed to proceeding along the lines of the Memorandum of Understanding that pre-dates both the 20th February agreement and 25th January 2015 — the date on which the Greek people elected a new government with a mandate to negotiating the new process established by the 20th February Eurogroup agreement. It is difficult to believe that our partners consider that a successful reform drive can be carried out under such restrictive and pressing constraints, including the financial squeeze that my government is currently labouring under.
Effectively what Tsipras is saying is that the institutions (formerly known as the Troika, the IMF, European Central Bank and European Commission) are trying to play by the rules of Greece’s old bailout, when in fact something entirely new has been agreed — something that Angela Merkel doesn’t seem so sure is true.
The back-and-forth seen in the last few can’t go on much longer if Athens wants to stay solvent. Relations between the two countries are stretched to breaking point, with Greece’s politicians pushing for WWII-era reparations and threatening to flood Europe with migrants – while Germany’s most popular newspaper calls for “no more billions for the greedy Greeks.”
Unless there are more signs of a genuine concrete agreement on Monday, the stakes will rise and Greece will be a day closer to running out of cash — and the potential for an accidental exit from the eurozone.