BUSINESS

Greece's state cash is rapidly drying up again

TAGS: Finance

The state’s cash reserves are running low once again. “The more the days go by, the more the pressure grows,” according to one Finance Ministry official, as the absence of funding from the bailout mechanism is starting to have an impact.

Sources say that the state can only serve its obligations up to mid-May and at the moment there is an ongoing effort for the collection of state entity cash reserves so that they can be used as and when that is required.

Once again the government is having to manage its negotiations with its creditors amid cash woes. “The situation is not as bad as it was last year,” ministry officials poignantly noted, while making it clear that the problem has already started. This month a hole of 500 million euros was filled using repos, with the Bank of Greece taking a short-term loan from state entities with available cash.

The law dictates that state entities deposit their cash reserves in a special BoG account, and in this context bodies such as hospitals, local authorities, the Manpower Organization (OAED) and others have transferred their cash from commercial banks to the central bank.

Parliament has done the same, with Greece’s main healthcare provider EOPYY set to follow, as pressure is coming not only from the Finance Ministry but also the offices of the prime minister and his deputy.

That way, officials at the State General Accounting Office expect the cash reserves to last up to the first 20 days of May. So far, the Finance Ministry has served the state’s obligations without delay, but officials warn that unless the country receives a bailout installment in May, the ministry will be forced to create fresh debts.

The ministry is already being particularly cautious in approving expenditures, authorizing only funds for direct and necessary requirements, and leaving any spending that is not of such a high priority for later.

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