Blame the Germans:
"Greece’s cash squeeze stirs more worry about default" by Landon Thomas Jr., New York Times April 06, 2015
NEW YORK — As a crucial date approaches for Greece to make a major debt payment, the markets are again weighing the possibility the country could default on its loans.
Such an outcome — a decision by the Greek government not to pay its creditors — has generally been seen as remote, even since the left-wing Syriza government came to power in January.
But now, after months of bitter, inconclusive negotiations over the austerity measures Greece would have to impose in order to secure desperately needed cash from Europe, government officials are grappling with very limited options for handling their cash squeeze.
On April 9, Greece must pay 458 million euros ($503 million) to the International Monetary Fund, a date and sum that in recent weeks have come to loom large for investors, many of whom worry how the markets would absorb a messy Greek default.
Adding to these concerns was the abrupt decision by Greece’s finance minister, Yanis Varoufakis, to fly to Washington and meet with the IMF’s managing director, Christine Lagarde, on Sunday.
In a statement, the IMF said Lagarde and Varoufakis were having an “informal discussion on the Greek government’s reform program.”
Greece has said it has the money to pay the IMF this week. Moreover, Varoufakis, from the moment he became finance minister, has gone out of his way to cultivate ties with Lagarde and has said that paying the fund was a priority for Greece.
Over the past month, however, the economic situation in Greece has worsened drastically. Deposits worth about 25 billion euros have been withdrawn from Greek banks, some of which are now on life support with help from the European Central Bank.
The government’s tax collections are also suffering as companies and consumers fret over the prospect that Greece might be forced to abandon the euro.
With Europe refusing to permit Greece access to temporary lines of liquidity — such as letting its banks issue more short-term treasury notes — Greece is running out of cash. That means if it were to pay the fund 458 million euros Thursday, there might not be enough to pay pensions and public sector wages the next week, some Greek officials say.
Varoufakis, whose party came to power on a platform of ending the policy of putting the needs of Greece’s creditors above its suffering citizens, was to make the case to Lagarde that his government would not be able to meet all of its commitments.
There is some wiggle room. Even if Greece does not pay up on Thursday, it will not be in technical default, as there is a 30-day grace period that could allow the government to pay its pension and wage obligations and strike a broader deal so that its creditors could disburse the needed funds.
Varoufakis is also planning to meet with US Treasury officials Monday in the hope that the United States, as the dominant voice at the IMF, might pressure fund officials, and Europe as well, to cut Greece some slack.
The United States has been quietly critical of Europe’s harsh stance toward Greece, warning of the consequences that a Greek default and exit from the euro would have on financial markets.
All told, Greece owes 320 billion euros, with close to 20 billion euros in payments coming due in the next six months.
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I don't think I missed anything.
Sorry I'm not being very disCERNing in my analysis or posts these days.
