- Creditors rule out a further bailout program for Greece; suggest that any future program would be entirely different.
- Greece, creditors resume negotiations on Monday.
- Athens expected to run out of cash by mid-May ahead of a series of summer debt payments.
Eurozone creditors have ruled out another massive bailout program for Greece, as the country struggles to amass enough funds to keep government programs running and avoid defaulting on summer payment deadlines to the European Central Bank.
Talks between Greece and its Eurozone counterparts broke down last Friday, extending the deadlock to eight consecutive months. Dutch finance minister and Eurogroup head Jeroen Dijseelbloem said that another massive bailout program was off the table and that any future agreement would be completely different than the current €240 billion rescue package. Athens reportedly needs €60 billion by the end of June to avoid defaulting on a series of summer debt payments.
Eurozone finance ministers have refused to unlock Greece’s next bailout tranche until Athens begins implementing a series of financial reforms. A failure to repay the troika of lenders would result in a “straightforward default event,” according to analysts quoted by The Telegraph.
The cash-strapped Hellenic Republic will require another cash infusion well before the end of June, as the government struggles to pay €1.7 billion worth of public sector salaries and pensions due at the end of the month. The Syriza government must then pay €960 million to the International Monetary Fund in the first half of May. The Greek government is expected to run out of money by that time, leading to a high probability of some kind of default.
Negotiations between Greece and its creditors resumed on Monday.
The far-left Syriza party, which swept to power in January on a campaign promise of anti-austerity, has seen its public support wane in recent months. Greek support for the government fell to 46 percent this month, down from 56 percent a month earlier, according to the University of Macedonia. Several other surveys suggest most Greeks want the government to reach a compromise with its international creditors.
The euro fell off its recent highs on Monday, as a dearth of economic data kept Greek debt negotiations at the forefront. The EURUSD touched a daily low of 1.0819. It would later consolidate at 1.0834, declining 0.25 percent. The pair’s next support level is 1.0789, the low from April 24. On the upside, initial resistance for the EURUSD is likely found at 1.0901, the high from April 24.