dimanche 5 avril 2015
Greek officials reportedly have a plan that would 'cause a furor in the markets'
Posted on 16:06 by nice news
Greece needs to make some payments in April.
For a corporation like Apple, cash in these amounts would be a rounding error on the balance sheet.
For the country of Greece, it’s becoming an insurmountable obstacle. That’s how broke Greece is.
No more than €462 million is due the IMF on April 9. A few days later, €1.4 billion in T-bills come due, and in a few more days, another €1 billion in T-bills. Then on May 1, Greece needs to pay the IMF €202 million in interest. In total, Greece has to scrape together a little over €3 billion this month.
But it won’t be able to make even that first payment to the IMF. Not unless it skips paying salaries and social security. To make both payments, it needs new money from the Eurozone “institutions,” as the Troika is now called – that is, from taxpayers in other countries.
But that deal is hung up after the Syriza government has done everything in its power to alienate and confuse even its most ardent supporters in the Eurozone.
Complicating the issue is that it’s the IMF that’s first in line. If Greece fails to pay the IMF on April 9, it would have a one-month grace period. Then the IMF’s executive board would declare Greece to be in default. No developed country has ever dared to default on debt owed the IMF. And things might get hairy very quickly.
That default on IMF debt would constitute an event of default for the European bailout fund, the EFSF, which under the provisions could cancel its loan facilities and declare the principal amounts due immediately, according to Bank of America. This would then cascade out from there into a massive default.
For a corporation like Apple, cash in these amounts would be a rounding error on the balance sheet.
For the country of Greece, it’s becoming an insurmountable obstacle. That’s how broke Greece is.
No more than €462 million is due the IMF on April 9. A few days later, €1.4 billion in T-bills come due, and in a few more days, another €1 billion in T-bills. Then on May 1, Greece needs to pay the IMF €202 million in interest. In total, Greece has to scrape together a little over €3 billion this month.
But it won’t be able to make even that first payment to the IMF. Not unless it skips paying salaries and social security. To make both payments, it needs new money from the Eurozone “institutions,” as the Troika is now called – that is, from taxpayers in other countries.
But that deal is hung up after the Syriza government has done everything in its power to alienate and confuse even its most ardent supporters in the Eurozone.
Complicating the issue is that it’s the IMF that’s first in line. If Greece fails to pay the IMF on April 9, it would have a one-month grace period. Then the IMF’s executive board would declare Greece to be in default. No developed country has ever dared to default on debt owed the IMF. And things might get hairy very quickly.
That default on IMF debt would constitute an event of default for the European bailout fund, the EFSF, which under the provisions could cancel its loan facilities and declare the principal amounts due immediately, according to Bank of America. This would then cascade out from there into a massive default.
Greek officials reportedly have a plan that would 'cause a furor in the markets'
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