Greece has enough cash to meet its debt payments into June, Eurozone and Greek officials said yesterday, quashing fears of an imminent default, as a deal to inject more cash into the debt-addled state, at a meeting in Latvia tomorrow, looks unlikely.
“The liquidity situation in Greece is already a little tight, but it should be sufficient into June,” Euro Working Group (EWG) chairman Thomas Wieser told Austrian media.
A spokeswoman for the Greek finance ministry told City A.M. that “progress” was made at the EWG meeting yesterday, as they try to hammer out a deal that would grant Greece extra bailout cash.
However, a deal that grants too many concessions to Greece’s creditors could create a political problem for Prime Minister Alexis Tsipras.
The spokeswoman declined to say whether the main disagreements had been bridged. Greece does not want to give in on certain “red lines”.
State minister Nikos Pappas said: “The negotiations have their difficulties and the lenders have tabled requests which have not been accepted so far.”
“They will not be accepted as they are the red lines of the government...accepting VAT hikes on islands and pension cuts.” Tsipras risks losing the support of some Syriza factions if a deal includes such concessions.
“Should Tsipras be unable to convince the Left Platform, which has close to 30 MPs... to back the deal then the government would be in danger of losing its majority,” analysts at Greek think tank Macropolis said.
“Fresh elections cannot be ruled out, in which capital controls might have to be imposed to stem deposit flight.”
Meanwhile the European Central Bank yesterday increased the limit on emergency lending to Greek banks by €1.5bn to €75.5bn.