ECONOMY

Mid-March to be the first test for state coffers

The inflexible payments Greece has to make to its creditors this year are set to peak in the summer. January is the easiest month, as the repayments due then amount to just 515 million euros, but the dues will increase almost every month that follows, reaching their highest in July and August, when 8.8 billion euros will have to be paid out in total.

If Greece chooses to forfeit some of its obligations, it will be choosing the path of a partial or complete default, opening a new chapter in the history of its economy.

In total the state’s 2015 dues add up to 22.5 billion euros and concern the repayment of bonds held by the European Central Bank, the repayment of International Monetary Fund loans, the payment of interest and bonds that were not included in Greece’s debt restructuring (private sector involvement, or PSI), as well as other loan obligations.

This month Greece must disburse 515 million euros to the IMF and in interest payments. In February this will grow to 1.6 billion euros and in March to 2.5 billion. Finance Ministry officials say that it is from mid-March that the problems will start, as at the moment the country’s existing cash reserves amount to 1-2 billion euros and will suffice to cover requirements up to mid-March. Solutions such as a new extraordinary issue of treasury bills will then be examined.

Once March is over, things will ease up briefly, as in April maturities add up to 615 million euros and in May to 1 billion. The problems will grow again in the summer, as Greece has to pay obligations of 2.6 billion euros in June, 5.1 billion in July and 3.7 billion in August. That is because two bonds held by the ECB, worth 3.5 billion and 3.2 billion euros, mature in July and August. If Athens has not reached an agreement with its creditors on the last inspection by then, payment will be impossible and other solutions must be found, ministry officials said.