Greece is battling to raise funds to avoid defaulting on a €5 billion debt repayment this week, as international lenders remained deadlocked over how to reduce its overall debt, even as Athens won parliamentary approval for its 2013 austerity budget.
The country’s debt management office has announced plans to cover the €5 billion debt through a treasury bill auction, but Greek banks expected to buy the issue can only raise about €3.5 billion of collateral acceptable to the European Central Bank.
The ECB has not given permission for Greece to maintain a temporary €17 billion ceiling for T-bill issuance due to be reduced this month to €12 billion, leaving the country without a financial safety net while it waits for a much-delayed €31.5 billion aid payment from international lenders.
The EU and International Monetary Fund were trying at the weekend to bridge a 5-10 percentage point gap in their respective debt forecasts for 2020, following a sharp downward revision by the IMF of Greek growth prospects in 2013-14.
The four-day budget debate triggered angry exchanges in parliament with the leftwing main opposition Syriza coalition claiming that Greece’s creditors were “playing games” with the country’s future.
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