ECONOMY

IOBE makes dramatic call to the gov’t

Athens will pay its installment to the International Monetary Fund on Thursday, while it managed to fully cover its treasury bill issue on Wednesday, but pressure is mounting on the government to make progress in its negotiations with the country’s creditors as well as reforms. Meanwhile, an Athens think tank has issued a dramatic call for an end to the prolonged uncertainty.

With the government seeming certain to pay the 450 million euros due to the IMF on Thursday, another challenge was successfully met on Wednesday as the Public Debt Management Agency (PDMA) auctioned six-month T-bills that will fetch a total of 1.4 billion euros by Thursday and cover the issue maturing on April 14.

The auction was covered exclusively by domestic investors, as foreigners who held some 750 million euros in the previous issue did not take part. Buyers included local banks, their subsidiaries and the Bank of Greece.

The Finance Ministry now estimates that existing cash reserves will be sufficient only until April 24, when the Eurogroup is due to hold its next meeting, with the Greek side hoping for a decision to disburse some of the pending bailout funds.

“Negotiations are ongoing. We are still waiting for Greece to harmonize its reform list with the three [creditor] institutions,” a spokeswoman for the German finance ministry said on Wednesday in a call for progress from the Greek side.

At the same time the Foundation for Economic and Industrial Research (IOBE) warned of the consequences of a rift with creditors and stressed that it is paradoxical for either side to use the possibility of a Greek exit from the eurozone as a negotiating tool or threat.

“The forecast for a further major drop in incomes and an increase in unemployment for at least two years [after a rift] is not a risky one. The long-term effects on the next few generations would be serious. The damage to the eurozone would also be significant, and would likely lead to a closer union among the more competitive economies on the continent,” IOBE estimated in the report published on Wednesday.