Greece Faces Cash Crunch as IMF Payments Come Due

New Greek government stands little chance of receiving help from eurozone soon

The Wall Street Journal

By MATTHEW DALTON and  VIKTORIA DENDRINOU

March 2, 2015 4:37 p.m. ET

BRUSSELS—Greece faces a cash crunch in the coming weeks with little hope of financial help soon from the rest of the eurozone, threatening a serious blow to the country’s fragile economy.

Though the Greek government secured an extension of its bailout program last week, that doesn’t give Athens access to cash pledged to it from the eurozone and the International Monetary Fund. To unlock that money, it will need to agree on a revised program of austerity measures and economic overhauls with its creditors, and pass them into law.

What Greece Won

FEB. 27, 2015

By Paul Krugman

The New York Times

Last week, after much drama, the new Greek government reached a deal with its creditors. Earlier this week, the Greeks filled in some details on how they intend to meet the terms. So how did it go?

Well, if you were to believe many of the news reports and opinion pieces of the past few days, you’d think that it was a disaster — that it was a “surrender” on the part of Syriza, the new ruling coalition in Athens. Some factions within Syriza apparently think so, too. But it wasn’t. On the contrary, Greece came out of the negotiations pretty well, although the big fights are still to come. And by doing O.K., Greece has done the rest of Europe a favor.

Greece Stirs Doubt on Debt Owed IMF

Cash-Strapped Athens Suggests It Might Be Short on Some March Payments

By IAN TALLEY And  ALKMAN GRANITSAS

Feb. 27, 2015 7:33 p.m. ET

32 COMMENTS

Greece’s cash-strapped government suggested in the past week that it might default on some of the debt it owes the International Monetary Fund in March, which would make it the first advanced economy in the institution’s seven-decade history to fall into protracted arrears with the fund.

Humiliated Greece eyes Byzantine pivot as crisis deepens

Neither side holds the upper hand in the strategic game of chicken which could still see Greece forced out of the euro

By Ambrose Evans-Pritchard, in Athens2:24PM GMT 28 Feb 2015

Greece's new currency designs are ready. The green 50 drachma note features Cornelius Castoriadis, the Marxisant philosopher and sworn enemy of privatisation.

The Nobel poet Odysseus Elytis - voice of Eastward-looking Hellenism - honours the 200 note. The bills rise to 10,000 drachma, a wise precaution lest there is a hyperinflationary shock as Greece breaks out of its debt-deflation trap at high velocity.

Greece seeks negotiations on ECB bond repayment

ATHENS Sat Feb 28, 2015 3:53pm IST

(Reuters) - Greece called into question on Saturday a major debt repayment it must make to the European Central Bank this summer, after acknowledging it faces problems in meeting its obligations to international creditors.

Greece runs out of funding options despite euro zone reprieve

Fri Feb 27, 2015 9:22am EST

* Greece faces 1.5 bln euro debt payment to IMF in March

* Lenders rule out three short-term funding options

* Pressure on Athens to quickly complete bailout review for aid

By Jan Strupczewski and Deepa Babington

What Greece Has to Do Now: Fix Its Economy

Michael G. Jacobides

FEBRUARY 27, 2015

After weeks of media frenzy around the Greek election and the new government’s once-ambitious plans to renegotiate with the Eurozone over its debt crisis, the searchlights of publicity are shifting. For all of its bravado, Greece was pushed into a corner in an eleventh-hour deal that will extend a bailout agreement for four more months. And although it has been given a temporary lifeline, little has been resolved.

Greece and geopolitics

A semi-guided missile

The Economist

America, much more than Europe, sees strategic stakes in the Aegean

Feb 28th 2015 | From the print edition

NEVER imagine that the euro zone is the only club in which Greece is a maverick player. The Hellenic relationship with NATO, and bilateral defence ties with the United States, have long been important (although many would say diminishing) and contested.

In Greece, Bailout May Hinge on Pursuing Tycoons

By LIZ ALDERMANFEB. 26, 2015

The New York Times

ATHENS — As he sifted recently through a sheaf of Greek bank accounts held by executives, politicians and other members of the Greek elite, Panagiotis Nikoloudis, the nation’s new anti-corruption czar, was struck by some troubling numbers.

A man who was claiming unemployment benefits and declared zero income on his taxes had more than 300,000 euros, or $336,000, stashed away at his bank. Another, who told the tax authorities that his annual income was just €15,000, turned out to have €1.5 million in various bank accounts.

Tsipras Reversal Draws Greek Sympathy as Party Rumblings Rise

by Maria Petrakis

"...While the main sentiment in Greece is hope, in Brussels the word being bandied about is “trust”..." 

Unlikely Winners of Greece's Surrender

FEB 26, 2015 2:00 AM EST

By Mark Gilbert

Bloomberg

The Greek government's apparent capitulation in debt negotiations with its euro partners makes it less likely that Athens will be forced out of the common currency. The real winners, though, are the European governments who have stuck with spending cuts in the face of mounting domestic opposition. They don't have to worry about a successful austerity renegade giving ammunition to their opponents.

ECB’s Draghi Defends Policy Toward Greece

Draghi Says ECB Is Willing to Accept Greek Bonds as Loan Collateral If Athens Sticks to Pledges

By TODD BUELL And  BRIAN BLACKSTONE

Updated Feb. 25, 2015 4:13 p.m. ET

The Wall Street Journal

FRANKFURT—European Central Bank President Mario Draghi defended the ECB against criticism that it acted in a heavy-handed way toward Greece during the country’s bailout negotiations with creditors, saying the central bank was simply applying its lending rules.

The Reason Austerity In Greece Didn't Work

2/26/2015 @ 4:13AM 71 views

Tim Worstall

Forbes

One of the little puzzles of the past few years has been why was the reaction of the Greek economy to austerity so much worse than that of other countries? For it is true that other countries (I think particularly of Spain and Portugal) had the same sort of shrinkage of the government budget, had the same (entirely wrong and inappropriate) monetary and currency policies but they did much better. Or at least not as badly. So what was the secret to that Greek economy that made the out turn so awful? And awful it is, Greece has had a fall in GDP akin to what the US had in the Great Depression of the 1930s. The answer, it appears, is that the underlying structure of the Greek economy is such that it just couldn’t take advantage of the meagre benefits that austerity did provide.

What Greece Needs

By ARISTOS DOXIADIS

FEB. 25, 2015

The New York Times 

ATHENS — The depression ravaging Greece is always framed as an issue of macroeconomics: fiscal policy was tightened too quickly; government debt is too high; the tools of currency devaluation and monetary expansion are not available inside the eurozone. But this is overly simplistic; local politics and microeconomic factors are just as important in explaining the depth of the crisis.

What Greece Can Learn From Israel About Tax Cheats

4 FEB 24, 2015 12:55 PM EST

 Bloombergview

By Stephen Mihm

Among the most closely watched commitments made by Greece to obtain a four-month extension of aid from its official creditors is a promise to overhaul its notoriously inefficient system of tax collection and administration.

Skeptics, particularly among the law-abiding citizens of other European countries who believe their tax euros will be wasted on the continued bailout of Greece, will have hard time buying this pledge.  

Greece debt crisis: Eurozone backs reform plans

BBC 

Eurozone finance ministers have approved reform proposals submitted by Greece in order to obtain a four-month extension of its bailout.

The Eurogroup said it had agreed to begin national procedures - parliamentary votes in several states to give the deal final approval.

The measures offered by Greece include combating tax evasion and reforming the public sector.

After Bailout Plan Approval, Greece Faces a Balancing Act

By JAMES KANTER and NIKI KITSANTONISFEB. 24, 2015

The New York Times

BRUSSELS —

Eurozone finance ministers on Tuesday approved Greece’s plan meant to ease the hardships created by its international bailout, extending that loan program by four more months.

In revising the terms of the bailout program, the new Greek government pledged to take a disciplined approach to budgets, spending and tax collection, while remaining committed to relieving the “humanitarian crisis” caused by years of economic hardship and high unemployment. Many Greeks blame the austerity-budget requirement of the bailout program, agreed to by a previous government, for those privations.

What The Eurogroup Demands Is Absurd

by Paul Krugman on 19 February 2015

Paul Krugman was interviewed by Evan Davis on the BBC’s Newsnight programme on 17th February. The following is a transcript of the part of the interview dealing with the negotiations for a new deal for Greece.

I don’t know what you think but how far should the Eurozone go, the European Commission, in helping yield to what Syriza is asking for?

GREECE'S FUTURE IS ITS PAST

Posted by Rebecca Harding on Feb 23rd 2015,

A deal was done at the last minute: Greece’s €172bn debt bailout was extended for a further four months after a turbulent week of bluff and counterbluff. Even now, there are no formal agreements on the required reform process ahead and without these agreements the deal will not be ratified. It appears that the Greek government is keen to demonstrate its willingness to reform by focusing on tax evasion and civil service reform, but it is unlikely that this will be sufficient for either Germany or the ECB.

Grexit: Was Germany ready to pull the trigger?

A temporary deal largely on German terms has been struck to avoid Greece crashing out of the euro. A key factor may have been that Germany was ready to contemplate Grexit - Syriza wasn't.

23 February  2015+

As we predicted and noted in our instant response to Friday’s deal to keep Greece in the euro, as things stand, Syriza spent an awful lot of political capital in return for limited result.+

There are several reasons why  Syriza’s bargaining hand is relatively weak. At the end of the day, Syriza isn’t yet prepared to contemplate Grexit, with over 70% of the Greek public still in favour staying in the euro. In contrast, it may well be the case that the German government genuinely was ready to let Greece go, absent a deal. You can credit Syriza for acting responsibly on that point. However, it also meant that in that epic stand-off between Wolfgang Schäuble and Yanis Varoufakis, only one of them had a nuclear option.+