Greece - Down to the wire
Greece ended up making its latest IMF repayment of EUR750m yesterday at the 11th hour, but it was the way in which they did it which should concern everyone. They drew on their, wait for it, IMF SDR emergency reserve account to pay it! Such drawings must be repaid within a month. This seems to be the final straw for the IMF who have reportedly told the EC and ECB they will not be part of the next inevitable bailout program for Greece. Greece will seek to garner more cash reserves from local municipalities and pension funds to fund salaries and pensions for the month and incredibly it looks as if they will use further bail-out drawings to pay back the SDR funds borrowed yesterday. This is like you drawing down on your homeloan to pay off your credit card and then drawing from your overdraft to pay back the home loan, all within the same bank, just that the person is a sovereign state and the bank is the IMF. A report emerged yesterday to show how close to the wire they are with only EUR90m cash reserves left. On any level this is untenable and the implications quite severe.