ATHENS: Greece’s government is taking desperate measures for keeping it float after the warnings that the country could bust within few weeks. Greece’s scheme of repo transactions, where government bonds are used for short-term borrowing requirements is believed to have raised upwards of €600m (£442m) in recent weeks. Earlier this month the leftist-led coalition suspended some €300m of EU subsidies for farmers to help pay €1.7bn in public sector wages and pensions due next week. Greek subsidiaries of multinationals have also been approached for loans.
In what was interpreted as a sign of growing concern over the outflows, the European Central Bank among the bodies that have bailed out the Greek economy to the tune of €240bn , agreed on Wednesday to raise emergency liquidity for local banks by €1bn to €71bn.
The move makes agreement over reforms with international creditors ever more urgent and prime minister Alexis Tsipras has been given until Monday to draft measures that will convince peers he is determined to overhaul the economy. Lenders have promised to unlock a €7.2bn aid disbursement if progress is made.
In a balancing act not seen by any European administration in recent times, the cash-strapped coalition has sequestered the reserves of public bodies; seized EU subsidies destined for farmers and postponed all payments for state supplies in the scramble to continue servicing its debt and paying salaries and pensions. Pension funds have been raided to raise money for Treasury bill auctions.
“It is clear we are reaching the end and very soon won’t be able to pay,” former finance minister, Stefanos Manos, told the Guardian. “They are scraping the bottom of the barrel for everything they can find.”
The last-resort measures came as Deutsche Bank warned that Athens was at risk of being pushed into default on 9 April when it must meet a €450m debt repayment to the International Monetary Fund. The precarious state of Athens’ finances has been exacerbated by a precipitous decline in tax revenues – more than €1bn below target since January – said the bank’s economists.
