We’ll run out of cash by April 9th, Greece tells creditors

Euro zone officials reject request for more loans before critical reforms in place

Greek finance minister Yanis Varoufakis  during a parliamentary session in Athens on April 2nd, 2015. Greece sent an updated list of reforms to lenders on Wednesday to try to unlock financial aid and avoid a default but euro zone officials said more work was needed before new funds could be released. Photograph: Alkis Konstantinidis/Reuters

Greek finance minister Yanis Varoufakis during a parliamentary session in Athens on April 2nd, 2015. Greece sent an updated list of reforms to lenders on Wednesday to try to unlock financial aid and avoid a default but euro zone officials said more work was needed before new funds could be released. Photograph: Alkis Konstantinidis/Reuters

 

Greece has told its creditors it will run out of money on April 9th, making an appeal for more loans before reforms on which new disbursements hinge are agreed and implemented, but the request was rejected, euro zone officials said.

The appeal was made by Athens at a teleconference of euro zone deputy finance ministers on Wednesday organised to assess how far Athens still was from meeting the conditions for unlocking new financial aid.

Greece’s appeal echoed remarks by interior minister Nikos Voutsis on Wednesday that the country would have to choose whether to pay back €450 million to the International Monetary Fund on April 9th, or pay salaries and pensions. He said it would choose the latter.

A government spokesman later denied Greece would miss the IMF repayment deadline. But the choice Athens said it would face was repeated at the closed teleconference with creditors.

Greece can get €7.2 billion of new loans from the euro zone and the IMF if it implements reforms that the previous government agreed would be the condition for disbursement.

Election promises

The new government does not want to implement most of these measures because they go against its election promises of ending budget consolidation policies.

It is now negotiating a new list of steps that would keep both sides satisfied.

The Greek representative on the call said a deal on the reforms should not be a “postmortem” for the country as “there is no way we can go beyond April 9th”, euro zone officials said.

He added that holding off with new loans until a deal with creditors can be reached was unrealistic.

But others on the call, including Germany, reiterated that for Greece to get the reminder of the €240 billion bailout, Athens would have to agree on the reforms and implement them - and there was no chance of releasing the funds on April 9th.

Euro zone officials pointed out to Greece that it could manage its liquidity by tapping funds of various entities in the Greek general government and those of state-owned companies, even if it had to pass appropriate laws to do so if necessary.

But Greece repeated that this would not be enough to cover both the IMF repayments and its wage and pension obligations in April after next week.

No resolution was reached on the call regarding what would happen if the talks continue beyond April 9th.

Greece sent a more detailed list of planned reforms to institutions representing the creditors - the European Commission, European Central Bank and IMF - earlier on Wednesday.

Far from satisfactory

But the list was a work in progress and far from satisfactory, representatives of the institutions said on the call.

Some policies such as social measures went in the right direction, while others still lacked detail or an estimation of how much they would cost, they said.

Others still, like certain tax measures, the labour market, a law to allow the payment of tax debt in instalments or steps to limit the autonomy of public revenue administrations, went clearly against earlier agreed objectives, officials said.

Fiscal reform assumptions were far too optimistic, some officials on the call said.

Euro zone officials said on the call that even though teams of creditor representatives have been in Athens for three weeks, useful work went on only in the last four days and at this rate reaching a deal by the end of April was impossible.

They said creditor representatives were struggling to get information on the policy intentions of the Greek government because Greek officials were sometimes unaware of plans or not allowed to talk about them.

Euro zone deputy finance ministers and the institutions representing the creditors will hold further discussions on Greece on April 8th, but it is unlikely that a deal could be reached by then, officials said.

They said the aim was to have an agreed list of reforms, including their impact on the Greek budget, by the week of the next meeting of euro zone finance ministers on April 24th in Riga.