Greece is right to urge for a conclusion of the Program Review as soon as possible, insisting that talks and agreement should be over by the middle of April. Athens is right to insist and to slam the International Monetary Fund over the delays that may end up in a credit event.
Then Review conclusion means that Greece will also receive a bailout tranche of the 83-billion-euro third bailout signed last summer.
Without bailout tranche, Greece is at risk to default on European Central Bank in June and July.
According to Bloomberg, “Greece faces more than 10 billion euros ($11.4 billion) of debt repayments in June and July which may strain its finances unless Prime Minister Alexis Tsipras can access the second tranche of money from the country’s third bailout package.”
Economists closely monitoring the developments in Greece sees the possibility of high risk that Greece could be dragged again to a default.
“My odds for another Greek crisis this summer are relatively high,” said Carsten Brzeski, chief economist at ING Diba AG in Frankfurt. “Given the extremely slow pace of the implementations, the review, Syriza’s loss of popularity in opinion polls and still little appetite for debt relief, the next crisis is already in the making. It’s only a matter of time before it happens.”
One does not need to be an economist to see the risks in delaying the Program Review. The Formula is simple: No bailout tranche, no repayment of loans if they amount billions.
I suppose, that this month (April 13th) Greece will be able to repay the IMF and do not go ‘again default to IMF’ for silly 400 million euro.
It is clear that the IMF is at odds more with Germany than with Greece over the “future of the Greek debt” and insists on Debt Relief. Messages from Berlin today show that Germany insists on No Debt Relief.
What I found Interesting in the WikiLeaks transcript of the conversation between the IMF’s Poul Thomsen and Delia Velsulescu was among other that Thomsen had the idea that “two programs for Greece may be needed.”
Can you imagine that Greece signs another bailout with the IMF only and has to serve two bailout program at the same time?
PS sorry, I cannot tell you the height of the tranche, I don’t know it.