Bloomberg: Greece risks default within weeks if deal with lenders delays

greece_strugglesAs negotiations over the disbursement of bailout funds for Greece drag on into their seventh consecutive month, the deadlock threatens the country with default within weeks, Bloomberg reported on Thursday.

Two officials directly involved in Greece’s 240 billion euros bailout said the country could potentially use its available reserves to make it past the end of this month. A third official said Greek financing needs, including debt repayments to the IMF, are only safely covered for another two weeks.

The officials asked not to be named while negotiations continue. A spokesman for Greece’s finance ministry declined to comment on when the country may run out of cash.

Greece needs to refinance or repay about 6.5 billion euros ($7.2 billion) in debt and interest in the next three weeks, including Treasury bill redemptions, according to data compiled by Bloomberg.

To top that, its budget forecasts a 2.1 billion euros cash deficit in March. A tax-revenue shortfall opened a hole of 217 million euros in January, derailing budget targets.

“There’s no chance the quarrel [with Greece’s lenders] won’t affect the economy” said Haris Theoharis, a lawmaker with the Potami party and a former secretary of public revenue. “Every investment has been put on hold, pending the result of the talks,” he told Bloomberg by phone on Wednesday.

Finance Minister Yanis Varoufakis said that the country has an alternative plan to plug its financing shortfall in March, without specifying what it was.

“We go into the negotiations with optimism, with especially good preparation, and I believe there won’t be a development,” Varoufakis said in Athens, on Wednesday. The answer to the question of whether “there is an alternative is that there is one,” he said.


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