Greece faces daunting funding needs in May

Greece faces daunting funding needs in May

Athens, May 4, 2015/ Independent Balkan News Agency

By Zacharias Petrou

Greece’s next payment to the International Monetary Fund, totaling approximately 190 million euros in interest payments, is due May 6 because of the May Day holiday in Greece.

These funds are available, however, Greece’s following payment to the IMF, of 760 million euros, is due May 12 and the government has suggested it will struggle to make this installment.

On May 8 Greece must roll over 1.4 billion euros of Treasury bills (there shouldn’t be a problem covering this) while on May 13 almost 500 million euros are needed to pay public sector salaries (up to May 15).

At the end of May, another 1.1 billion is required to pay the remaining salaries and pensions plus another 900 million euros for private sector pensions and 400 million euros in interest.

The above funding needs signal growing pressure on the government at home and abroad to reach an agreement with European and IMF lenders to avert a national bankruptcy.

Bloomberg reported Monday that unemployment data on Wednesday will highlight that more than a quarter of Greeks remain out of work, according to economists. The figures will come a day after the European Commission gives its latest assessment of the country, when it will probably cut its 2015 growth forecast.

In light of the pressing funding needs and with the real economy suffering from political uncertainty, pressure is mounting on the Greek Prime Minister Alexis Tsipras to seal a deal with the country’s creditors but also find a way to convince his own party members that they should vote in favor of such an agreement.

“They (IMF) are asking us to not touch anything (from the austerity measures) that have ruined Greek people’s lives in the last five years,” Labor Minister Panos Skourletis said Monday. Asked whether Greece will be in a position to make the IMF payment, Panos Skourletis told Mega TV: “The country has chosen to pay its obligations and reach an agreement (with lenders). We are trying to have the money.”

Wednesday May 6 is seen as a key day by the government because the European Central Bank could opt to increase the haircut that the central bank applies to the collateral offered by Greek lenders in exchange for liquidity.