While we are not certain how many times we have used the
above headline in the past we know it is not the first time. Nor the fifth. Yet
here we are again, reporting that Greece is out of money again. "Near-bankrupt
Greece is fast running out of cash while it waits for its next installment of
aid from international lenders, a deputy finance minister said on Tuesday,
sounding the alarm on the country's precarious financial position. Greece's
European partners have repeatedly promised the country will be funded through
August, when it must repay a 3.2 billion euro bond, but the details of
the funding have yet to be disclosed. In the absence of that money,
Greece would run out of funds to pay everyday public expenses ranging from
police and other public service wages to pensions and social benefits.
"Cash reserves are almost zero. It is risky to say until when (they will
last) as it always depends on the budget execution, revenues and
expenditure," Deputy Finance Minister Christos Staikouras told state
NET television" In other words just like the US yesterday, Greece has also
overestimated its revenues and underestimated its expenditures; also Greece in
August is what the US itself will be in about 3-4 months, when the debt ceiling
is hit. Luckily, the political environment in D.C. is open and cordial, and a
prompt resolution to both the debt ceiling issue and the fiscal cliff,
especially as they all coincide just in time for the presidential election is
guaranteed. The tragic Greek lament continues via Reuters:
When, oh when, will Greece just say enough to this endless tragicomedy and finally pull the plug, letting the chips fall where they may, and extricate everyone from this ridiculous reactionary headline chasing and allegiance to political "fundamentals" driving global stock markets?"[W]e are certainly on the brink, we did not receive the aid tranche we were supposed to and we have the pending issue of an ECB bond maturing on Aug. 20."
Greece has narrowly dodged bankruptcy several times before, with the government carrying out a juggling act of holding off on paying some suppliers and issuing T-bills until the next tranche of aid from lenders arrives.
The assessment of Greece's progress in meeting the terms of its bailout by EU/IMF inspectors, who are currently on a visit to Athens, is not expected until September.
Adding to the uncertainty, Greek political leaders have been wrangling over 11.5 billion euros of cuts that are crucial to appeasing the lenders.
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