Greece could 'face cash shortage'

Greece's finance ministry has warned that anti-austerity party Syriza will face a rapid cash shortage should it win snap elections.

Greece's anti-austerity party Syriza will face a rapid cash shortage should it win snap elections this month and challenge the country's EU-IMF creditors, the finance ministry has warned.

The ministry said Greece has already exhausted a 15 billion euro ($A22.50 billion) cap on treasury bill sales and would need the consent of its European Union and International Monetary Fund creditors to sell more.

To end the impasse, the country would have to conclude an EU-IMF fiscal audit pending since last year, it said.

"(Greek) banks will be hard-pressed to find the required liquidity, and therefore purchase Greek state treasury bills, if the country has not concluded the audit," the ministry said.

Greece last year secured a two-month extension from its EU-IMF creditors to conclude the audit that will determine the release of some seven billion euros in loans.

This extension expires on February 28.

"The agreement of (EU) peers and creditors is required to raise the 15-billion-euro limit," the ministry said.

Last week, the ECB said that continued Greek bank access to its funding depended on Greece sticking to a path of reforms.

Syriza's 40-year-old leader Alexis Tsipras has insisted that Greece will stay in the eurozone if his party wins the election as expected. But he has also left open the possibility of diverting funds from debt repayment to growth following six years of recession.

The government of conservative Prime Minister Antonis Samaras says this is tantamount to a debt default that could cost Greece its place in the eurozone, a prospect that has caused turbulence on markets in the last two weeks.

"It's clear from any point of view that the subject of Greece leaving the euro simply does not exist," Tsipras told Realnews weekly on Sunday.

Syriza have pledged to overturn many of the austerity reforms enacted in Greece over the past five years in return for EU-IMF rescue packages worth 240 billion euros.

In particular, the radical leftist party seeks to halt state privatisations and raise wages and pensions to combat what it calls a "humanitarian crisis" caused by austerity.


Share

2 min read

Published

Updated

Source: AAP


Share this with family and friends


Get SBS News daily and direct to your Inbox

Sign up now for the latest news from Australia and around the world direct to your inbox.

By subscribing, you agree to SBS’s terms of service and privacy policy including receiving email updates from SBS.

Download our apps
SBS News
SBS Audio
SBS On Demand

Listen to our podcasts
An overview of the day's top stories from SBS News
Interviews and feature reports from SBS News
Your daily ten minute finance and business news wrap with SBS Finance Editor Ricardo Gonçalves.
A daily five minute news wrap for English learners and people with disability
Get the latest with our News podcasts on your favourite podcast apps.

Watch on SBS
SBS World News

SBS World News

Take a global view with Australia's most comprehensive world news service
Watch the latest news videos from Australia and across the world