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Financial Times: Greece Has Scraped Enough Cash for April But Default Looms in May

xreokopiaelladasAthens may have scraped enough cash to pay its dues in April but it may run out of funds in May and end up in sovereign default, a Financial Times report said.
Greek Foreign Minister Yanis Varoufakis has assured International Monetary Fund (IMF) Managing Director Christine Lagarde that the 458-million-euro loan installment owed to the organization will be paid on April 9 as scheduled. A government official also stated that another 420 million euros due to international investors, when a six-month treasury bill expires on April 14, will be paid on time.
“We will meet international obligations without any problem but it will be a squeeze to raise cash for domestic payments in the second half [of the month],” the Greek official said.
“Next month is a different matter. We are going to run out of money unless reforms are legislated to make some bailout funds available,” he said.
Greece has to make two further payments to the IMF in May, amounting to 950 million euros, along with 2.4 billion euros in pensions and public employees’ salaries, according to the Financial Times.
The Greek government cannot raise financing by selling more T-bills to Greek banks after a ban by the European Central Bank (ECB), while foreign investors have been scared off by the country’s increased political ambiguity.
The SYRIZA-led anti-austerity government has been unable to reach an agreement with the European Union and the IMF that would unlock 7.2 billion euros in funding due to delays by its economic team over reforms that would contradict SYRIZA’s pre-election promises not to raise taxes or cut back salaries and pensions.
Athens is now struggling to wrap up technical talks with creditors, hoping to reach a deal with Eurozone Finance Ministers in Riga on April 24.
Deputy Finance Minister Dimitris Mardas tried to reassure public sector employees and pensioners that the 1.4 billion euros allocated to them will be promptly paid at the end of the month.

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