Greece Will Run Out of Money in July

Eurozone countries look set to miss a self-imposed deadline next Monday to agree on aid measures for Greece, which risks running out of money in July. 

European Union officials are doubtful that a squabble among the International Monetary Fund, the Greek government, and other European agencies, finance ministers, and officials can be resolved at a crunch meeting of European finance ministers on February 20, Business Insider reported.

Meanwhile Eleni Chrepa at Bloomberg News cited an EU official as saying “this is going to be a very short meeting”.

The eurozone had wanted to settle the dispute over how best to manage Greece’s debt pile before the Dutch national elections in March, to avoid turning a financial problem into something more political.

France and Germany are also due to hold elections later this year, meanwhile the UK will likely trigger Article 50 in March and start formal negotiations to leave the European Union, adding to the backdrop of political risk.

The looming crisis has Greece facing repayments of more than €6 billion in July that it is unlikely to be able to meet without help or restructuring.

The disagreement centers on whether eurozone countries should ease their demands on Greece in return for a fresh bailout loan.

The IMF wants governments to sign off on debt relief for Greece and a halt to additional austerity measures for the country. Greece’s national debt is on an unsustainable path and is liable to become “explosive”, the fund said in a staff report this month, without more help.

The other eurozone governments disagree. More support for Greece is unpopular among voters and taxpayers, and, with elections looming, this is unlikely to change.

Germany’s finance minister, Wolfgang Schauble, told a German TV station that writing off Greek debt would violate terms of the Lisbon Treaty, which binds European nations together.

European Commissioner for Economic and Financial Affairs Pierre Moscovici, who had visited Athens on Wednesday, said he was “hopeful” for a political agreement before a meeting of eurozone finance ministers next Monday.

“An agreement on the way forward for the Greek program is absolutely necessary .... With (a) little effort from all stakeholders, (it) seems to me doable,” Moscovici told reporters in Vienna.

But with just four days to go there was little public sign of compromise.