Liquidity fears slow payments

Payments to state procurers have stopped as the General Accounting Office has blocked any state expenditure not related to salaries and pensions as a part of the efforts being made toward optimum cash management during the state’s current liquidity crisis. Coming up with cash appears particularly difficult, increasing concerns regarding a possible “accident” over the course of this month.

Sources say that the Accounting Office is examining every detail of public spending and putting off payments that are not pressing or even curtailing other spending considered excessive. Its officials say the budget has 4,772 expenditure categories that are not salary-related and concern procurements and operating expenses, among others. Their review has already saved some 180 million euros that can be used to finance the program aimed at fighting the humanitarian crisis, they add.

The Accounting Office is also trying to postpone obligations in the coming months so as to secure a cushion for the state’s needs. Payments to procurers, subsidies and other obligations are being postponed till later in a bid to lighten the March spending program. Even the heating oil benefit has not yet been credited to recipients’ bank accounts in its entirety.

The state’s liquidity remains marginal: The 500 million euros from the HFSF bank bailout fund has not yet yet been drawn as it requires a special law amendment. The directors of social security funds have not approved the utilization of their cash reserves in commercial banks, meaning the state cannot use that liquidity which amounts to 2 billion euros. In this context the Finance Ministry’s projections regarding the flow of revenues and expenditure show that there may be a shortfall of 1 billion euros toward the end of March.

This week the ministry has to cover two debt maturities, concerning the repayment of 350 million euros to the International Monetary Fund on Friday and treasury bills worth 1.6 billion euros that mature on the same day, with a fresh T-bill auction to that amount expected tomorrow. Officials say these obligations will be fulfilled normally.

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