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A European Union flag (left) hangs beside a Greek national flag beneath the Parthenon temple in Athens. (Bloomberg) |
ATHENS (AFP) ― Greece will try to raise 3.125 billion euros ($3.8 billion) in an auction of three-month treasury bills this week to try to avoid a looming cash crunch, a finance ministry official said on Friday.
“This is to cover the country’s current needs and avoid finding ourselves in a dead-end,” the official said as the government finds itself in great need of cash to pay salaries and pensions and faces redeeming a 3.2-billion-euro bond held by the European Central Bank on Aug. 20.
While Greece has been shut out of the long-term debt markets since 2010, it has regularly issued short-term debt, although the Tuesday auction dwarfs previous placements.
Greece raised 812.5 million euros on Tuesday in an auction of six-month treasury bills, paying a slightly lower rate of 4.68 percent.
In its last three-month treasury bill sale, on July 17, Greece raised 1.625 billion euros at a slightly lower rate of 4.28 percent.
EU-IMF bailout loans are supposed to keep the government solvent, but a two-month political deadlock after back-to-back elections in May and June put its reform program off track, and the next installment of some 31.5 billion euros in funds is now not expected before October.
Greek officials hope a deal can be found to postpone redemption of the bond.
“The government hopes that a solution will be reached at a European level,” the finance ministry official said.
Jean-Claude Juncker, head of the eurozone finance ministers group, who is set to visit Athens on Aug. 22, indicated recently in Brussels that a solution should be possible on the ECB-held bond.
