The Greek government may have to resort to internal borrowing in the first quarter of 2016 if the disbursement of the next tranche of bailout cash is delayed.
Greece’s loan obligations for the first three months of the year amount to 4 billion euros. They include repayments to the International Monetary Fund, bond maturities and interest.
The disbursement of the next bailout tranche will depend on the evaluation of the progress of reforms required by the program and the timeline of the evaluation. The next tranche is 5.7 billion euros.
If the evaluation of the bailout program is completed by mid-February and Athens gets a positive mark, the disbursement of the tranche will be unlocked and the government will not have any problems.
However, if negotiations with creditors are prolonged, the funds will not be disbursed on time and the Greek government might have to repeat what it did last year, meaning that it would tap to public organization funds. State organizations have about 15 billion euros at the moment.
In a recent finance ministry bill, there is a provision that the government can tap into Hellenic Financial Stability Fund cash until the end of 2016.
Also, there is another bill that obligates state organizations to transfer available funds from commercial banks to the Bank of Greece so that the state can borrow using repos.
Greece’s total loan obligations for 2016 amount to 13.7 billion euros, when in 2015 they were 25.5 billion euros. The “hottest” month regarding financial obligations is July, when Athens has to pay a total 3.7 billion euros to the IMF, the European Central Bank and interest.
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