Greece to run out of money by monthend

Greece’s radical Syriza government has confirmed that it will run out of money by the end of the month unless its creditors agree to release €7.2bn (£5.1bn) in bailout funds.

 

As Athens prepared to meet its lenders yesterday amid an increasingly sour atmosphere of claims and counter-claims, lead negotiator Euclid Tsakalotos conceded that the country does not have the funds to make a €1.6bn payment due to the International Monetary Fund due on June 30.

Athens delayed a payment to the IMF earlier this month, saying it would take advantage of a technical loophole, allowing it to “bundle” three tranches due this month into a single €1.6bn payment.

 

But Tsakaolotos has now admitted that Greece simply does not have the money.

He also underlined the fact that while Greece is still willing to make concessions to its lenders, it will not make pensions cuts – a key point of contention in the negotiations.

Tsakalotos’s intervention came after the governor of Greece’s central bank warned that his country is on the brink of an “uncontrollable crisis”.
Yannis Stournaras used his annual report to the Greek parliament to warn that failure to reach a deal would, “mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country’s exit from the euro area and – most likely – from the European Union”.

His remarks came amid growing fears that Greece may be unable to avoid plunging out of the euro.

 

In the UK, a spokeswoman for David Cameron said the government was “stepping up” its preparations for a possible “Grexit”, which she said was a serious economic risk to the UK.

“We don’t go into the specifics of these plans but of course they will be looking at how we make sure we have looked at the impacts on business, the banks and the financial sector and tourists,” she added.

 

Stournaras warned that failure to reach a deal would result in a deep recession and soaring unemployment in Greece, and force it to be “relegated to the rank of a poor country in the European south”.

Hopes of a deal have been severely tested in recent days by the increasingly bitter war of words, with prime minister Alexis Tsipras accusing the country’s creditors of “pillaging” Greece, while European commission president, Jean-Claude Juncker, previously seen as sympathetic to Greece’s cause, said the government was misleading the Greek public about the negotiations. — The Guardian.