This is the nightmare that keeps repeating. No one is talking about this yet. But, come summer, if a deal isn’t hammered out yet, this is going to become an issue for markets and the EU.
Because of differences of opinion, the Greeks, and the other people in Europe footing their bills, bailout talks have been delayed for months. The IMF and the EU want more draconian cuts to provide them with a 3.5% surplus. The Greeks are having an issue complying. Therein lies the issue.
The government has used between roughly nine billion euros ($10 billion) and 10 billion through repurchase agreements since last year, most of which has been rolled over, officials said.
“The situation is not pleasant but not as dramatic as last year,” said one government official, who declined to be named. “But the more time passes without concluding the review, we could find ourselves with our backs against the wall.”“The cash earned an annual 3.7 percent on average in the second half of last year and the return during the first half of 2016 is similar, better than what the entities would have been earning from commercial banks,” a second official said.
No one at the finance ministry was immediately available to comment.A third bailout deal of up to 86 billion euros was agreed last summer but a review of compliance with the terms of the agreement was expected to be completed late last year and Athens is still scrambling to conclude those requirements.
Greece needs the funds, more than 5 billion euros, to repay European Central Bank and IMF loans due in June and July.Talks between Athens, European Union institutions and the International Monetary Fund (IMF) have been snagged by disagreements over whether Greece’s cutbacks are enough to reach a primary surplus target of 3.5 percent by 2018.
“It has been a bumpy road since mid April but Greece can make it and not go bust until the end of May or early June by also using pension funds cash reserves and piling up state arrears if needed,” a senior government official told Reuters.
Don’t worry. If the Greeks keep this up, the EU will simply appoint a new leader to rule Greece, one who will obey their demands without terms.
If you enjoy the content at iBankCoin, please follow us on Twitter
The Greeks must lift their heads from bondage.
Since I joined iBC… This theme has come up for years. And every time they get mad, make some deal and we wait another year. Seems like it just doesn’t matter. Like an unemployed kid who’s mom reams him out every month over bills and then pays it. Lip service at worst.
That’s called enabling……….The Fed has been practicing it for 7 years now. The longer it takes place, the worse the outcome.
Agreed about enabling. But what when the unemployed kid tells mom if she does not pay his bills again, he will set the house on fire when she is at work?
I really don’t see the Euro in existance in 10 years.
The problem is that even as the ECB weakens the Euro, Greece doesn’t benefit versus it’s major trading partners: other Euro members. The only ones benefitting from the Greek bailouts are the banks and investors who had orignally owned the gov’t bonds. Now the bonds losses will be socialized among the EU governments (taxpayers) instead of the private investors.
Do you see where TLT is sitting ($127.27)? Seems like the Ark has termites…
“he will set the house on fire when she is at work?”……..Taper Tantrum?
The EU is a very strange association. Some of these countries do not do their budgets and accounting similarly at all. When they all try to mash themselves together and depend on each other, as if they did their countries the same way, it’s a mess– like a marriage between totally incompatible people, except worse, because there are more than 2 of them.