Greece: State may run out of funds by July

Papademos presented dramatic report during consultations

28 May, 14:16

(ANSAmed) - ATHENS, MAY 28 - The Greek State could run out of funds halfway June, according to a report drafted by outgoing Premier Lucas Papademos. Papademos described the country's disastrous economic situation to the political parties that were involved in the consultations led by Greek President Karolos Papoulias. These consultations have not had a positive result. According to the premier's report, which was published by newspaper To Vima (The Tribune), whether the Greek State will be able to pay its bills from the end of June depends on the question if EFSF and the IMF will grant the tranches included in the agreement closed with Greece. These payments will need to be authorised by the troika - International Monetary Fund, European Union and European Central Bank -, depending on the measure in which Greece is implementing the economic programme the Greek government has agreed with the troika. Several delays have already been recorded, like privatisations, so it remains to be seen whether the troika report will support the payment of the next tranche. Referring to the situation of the banking system in Greece, Papademos pointed out that ''the liquidity of the Greek banking system has fallen dramatically in the past two years, not only because Greek banks were excluded from the international markets but also because many citizens have withdrawn their savings, a consequence of the political uncertainty and fears for Greece leaving the euro." From the end of 2009 to March 2012, according to Papademos, bank deposits fell by 73.5%, while around 2 billion euros were withdrawn from banks in the first ten days of May 2012 alone.

''At this rate,'' the premier wrote in his report, ''Greek banks will no longer be able to loan from the European system in a matter of three or four weeks at most." Today, fifteen days after the report, Greece's financial situation is even worse. In an attempt to strengthen tax collection, today Greek Finance Minister Giorgos Zannias visits the two largest inland revenue offices in Athens. On May 30 he will chair a meeting attended by the directors of the ten largest tax offices and the five most important customs offices in the Attica region. In these circumstances people in Greece have to cast their ballot again, with an uncontrolled default looming that would set the country many years back, making the hard sacrifices made so far useless. (ANSAmed).

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