The Euro Working Group discussed Greece’s imminent funding problems on Thursday amid mounting concern about how the country will meet its obligations next months. Earlier in the day, Minister of State for Coordinating Government Operations Alekos Flambouraris suggested that Greece might delay payment to the International Monetary Fund if it cannot find the necessary money.
Greece is due to pay the IMF 1.6 billion euros next month but Flambouraris said that Athens might ask to delay this payment for two months. Greece has a total of 7.27 billion euros in obligations next month of which 4.6 billion euros is in treasury bills that are due to be rolled over. The government’s first T-bill issue will have to take place by Thursday as 1.6 billion euros has to be rolled over the next day.
One of the possible solutions to Greece’s funding problem is for its lenders to raise the 15-billion-euro limit on T-bill issues but the European Central Bank has so far refused a Greek request for an increase.
The German Parliament is on Friday due to approve the extension to Greece’s loan agreement, which includes another 7.2 billion euros in loans. In Thursday’s test ballot, 22 of 311 lawmakers in Chancellor Angela Merkel’s conservative bloc, comprising her Christian Democrats (CDU) and their Bavarian sister party, the CSU, opposed the extension and five abstained.
Their Social Democrat (SPD) coalition partners, with 193 seats, voted unanimously for the extension in their test vote.