Greece buys six weeks’ space with order transferring city funds

Greek officials expect an order that local governments transfer funds to the central bank will keep the country afloat until the end of May as European policy makers turn up the heat on Prime Minister Alexis Tsipras.

Municipalities’ reserves are estimated at about 1.5 billion euros ($1.6 billion), according to a person familiar with the matter, who spoke on condition of anonymity. Officials in Athens ruled out also seizing pension funds and the cash reserves of state companies because there wasn’t a need and the move would unnecessarily fuel anxiety, the person said.

With bailout talks stalled, access to cash is becoming increasingly critical. Resistance at the European Central Bank to further aiding the country’s stricken lenders is growing and the ECB is studying measures to rein in emergency funding for Greek banks, people with knowledge of the discussions said.

“A bigger effort by the Greek side is needed so that we can close the topic in the interest of both sides,” European Commission President Jean-Claude Juncker said in Vienna. “The intensity of the talks has increased in the past 4-5 days but not to the extent that they are ripe enough to come to a quick conclusion.”

Tsipras may meet with German Chancellor Angela Merkel on the sidelines of a European Union summit in Brussels on April 23, a Greek government official said Tuesday.

Extraordinary Meeting

Although a final accord is unlikely at a meeting of euro- area finance ministers in Latvia on Friday, another extraordinary meeting could be called at the end of April if needed.

“The sooner they come up with some kind of an agreement the better, but so far Europe has never missed the opportunity to miss an opportunity,” Standard Chartered Bank Global Chief Economist Marios Maratheftis said in a Bloomberg TV interview.

Since Tsipras assumed office in January, Greece has been using up its cash reserves to meet its obligations.

Greek lenders are mostly locked out of regular ECB cash tenders and instead have access to about 74 billion euros of emergency liquidity assistance from their own central bank — an amount that has been reviewed weekly by the ECB.

Greek bank bonds, including those of National Bank of Greece SA fell to records. National Bank’s 750 million euros of 4.375 percent bonds due April 2019 fell 0.8 cent on the euro to 54.35 cents, according to data compiled by Bloomberg. Piraeus Bank SA’s 5 percent notes due March 2017 fell for an eighth day to 60.73 cents in the longest losing streak since October, the data show.

Credit-default swaps insuring $10 million of Greek debt for five years rose to $5.5 million in advance and $100,000 annually, according to CMA. That signals an 87 percent probability of default, up from 84 percent yesterday.

The country is facing about 1 billion euros in International Monetary Fund loan repayments in the first two weeks of May and while it hasn’t drawn any funds from its bailout loan since August 2014, the government won’t miss any of those payments, the person said.


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