SYRIZA Will Face a €7 Billion Funding Gap if Creditors Back Out

Pedestrians walk past the bank of Greece in AthenGreece will face a 7-billion-euro funding gap in March if SYRIZA comes to power and clashes with the country’s international creditors who will stop the 7.2-billion-euro installment of the current bailout program, said a report of Greek newspaper “Proto Thema.”

In March, Greece has to come up with 4.6 billion euros for bond maturities. Total bond maturities for 2015 come up to 31 billion euros. Therefore, issuing Treasury bills, even if the Troika of international creditors allow it, won’t exceed 4-5 billion euros, financial analysts say.

Also, tax revenue is not guaranteed to reach the desired amounts. Athens must collect 4-5 billion euros each month from taxes. So far, tax revenue ranges 40-50% below target.

The new government needs 17-22 billion euros for its funding needs in 2015, provided that tax revenue is as high as projected in the state budget.

In February, the government has to return 2 billion euros to Greek creditors. In March, Athens needs another 1.5 billion euros for the first of three equal installments to the International Monetary Fund (IMF). The other two are due in June and September.

In July and August, Greece needs 17.585 billion euros for maturing five and 10-year bonds. In July, 9.585 billion euros are needed for 10-year bonds with 3.7% yield, while another 8 billion are due one month later for 5-year bonds with 6.1% yield.

At that time, salaries and pensions require an additional revenue of 17-22 billion euros. Therefore, the 7.2 billion euros from the international creditors are crucial for Greek economy, whether the need arises in March or in July.