Saturday April 19, 2014 Search
Weather | Athens
17o C
11o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Gov’t mulls options if coffers run dry

The Finance Ministry is urgently looking into alternative scenarios of how to maintain its weak cash reserves if the revenue inflows outlook deteriorates.

The only apparently safe option is to cut or suspend certain expenses. The total in June is projected at 5 billion euros, of which 4 billion is expected to flow in from the International Monetary Fund and the European Financial Stability Facility (EFSF).

The representatives of the country’s creditors -- collectively known as the troika -- may have put off their visit until after the formation of a Greek government but technical cooperation with the General Accounts Office (GAO) and monitoring of the budget is continuing on a daily basis. Sources report that besides political developments, the troika is “particularly concerned” at the recession of the Greek economy and developments in the budget.

The public coffers are seen running dry at the end of June, but this will depend on two key factors. First, revenue collection: In the first 10 days of May, inflows were about 15 percent lower than projected but there are fears that the slide may reach 50 percent. The GAO will have a picture for the first 20 days on May 23, while the last three days of the month are considered crucial, when 1.5 billion euros of the month’s budgeted total of 3.6 billion are expected to flow in.

Second, whether the IMF and EFSF installments are disbursed: This is not certain, as the decision will be purely political for both providers and evidently partly linked to political developments. Earlier this month the eurozone approved a disbursement 1 billion short of the 5 billion euros that were expected.

If revenue collection keeps faltering and the IMF and EFSF loans do not arrive, the first option the ministry is considering is cuts in income tax rebates and credits to social security funds. It may also trim grants to various state agencies and payments to public sector suppliers. This particular tactic was employed last September and enabled the government to retain cash until mid-December.

Another option considered is to continue to issue treasury bills. Of the budgeted 5 billion in expenses, 3.6 billion euros comprise the refinancing of T-bills and interest payments.

There is also the option of not paying Greece’s contribution to the EFSF, which amounts to 900 million in June. The eurozone may approve its postponement to July or August.

Finally, the government may use part of the resources of the Financial Stability Fund (FSF), which are mainly earmarked for the recapitalization of banks. The fund currently has a reserve of 3 billion euros.

According to statements by FSF members, the fund will disburse 18 billion on Tuesday or Wednesday to boost banks’ capital base. National Bank of Greece will receive 6.9 billion, Eurobank 4.2 billion, Alpha Bank 1.9 billion and Piraeus Bank 5 billion euros.

ekathimerini.com , Friday May 18, 2012 (22:18)  
Eurobank share offering on April 25-29
PPC to issue corporate bond of 500 mln
Primary surplus continued by end-March
Eurobank eyes top Core Tier 1 level in Greece
Greek Christians mark rare Good Friday in north Cyprus
Hundreds of Greek Orthodox pilgrims, some coming home after 40 years of forced exile, commemorated the crucifixion of Jesus in a rare Good Friday service in northern Cyprus. Held in this med...
Greece offers to help find Turkish F-16 lost in 1996
Greece officially offered on Thursday to assist Turkey in its efforts to locate and salvage a Turkish Air Force fighter jet which crashed in the Aegean almost 20 years ago. Greek Defense Min...
Inside News
BASKETBALL
Greens lose badly as CSKA Moscow
Panathinaikos has a mountain to climb in order to reach the Final Four of the Euroleague after losing at CSKA Moscow on Friday for a second time in two days, only this time it was comprehens...
BASKETBALL
Former Red Bourousis wrecks Olympiakos´s hopes for a break
Olympiakos tried harder in Game 2 of the Euroleague play-offs in Spain, and Real Madrid was not as good on Thursday as in Game 1, but the Spaniards still emerged victorious on the night with...
Inside Sports
COMMENTARY
The placebo effect and the economy
Among the greatest mistakes made in the years of Greece’s hard landing is that citizens did not get the chance to sense that aside from austerity and pain the economic adjustment program als...
COMMENTARY
Ukraine is a crisis—but not a Cold War
Given Russia’s annexation of Crimea, the imposition of US and European sanctions, and the potential for more escalation in Ukraine, we are witnessing the most important geopolitical events s...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Greek Christians mark rare Good Friday in north Cyprus
2. Eurobank share offering on April 25-29
3. Greens lose badly as CSKA Moscow
4. Former Red Bourousis wrecks Olympiakos´s hopes for a break
5. PPC to issue corporate bond of 500 mln
6. Greece offers to help find Turkish F-16 lost in 1996
more news
Today
This Week
1. Greek Christians mark rare Good Friday in north Cyprus
2. Eurobank share offering on April 25-29
3. Greece startup leaders say they can’t break jobless cycle alone
4. Ground-breaking Good Friday mass signals thaw in Cyprus
5. Mayoral candidates clash over Athens mosque plans
6. Seven arrested over Toumba violence
Today
This Week
1. Greece's market return mirrors return of tourists
2. Samaras sees no need for third bailout
3. Parties start announcing candidates for European Parliament elections
4. Greece startup leaders say they can’t break jobless cycle alone
5. Germany signals easing on euro area before Merkel’s Greek trip
6. IMF's Thomsen says Greece not fully financed to 2016
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.