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Eurozone countries’ finance minister meeting with Greece on Brussels, last Monday, May 11, included the Greece’s unpaid debt.
Greece is quickly running out of cash to meet the deadline on Tuesday, May 12 for a big loan payment of approximately 757 million Euros or almost $848 million to the International Monetary Fund and by mid-July, Greece must pay the I.M.F. another nearly 3 billion Euros and roll over approximately 11 billion Euros of short-term debt.
Athens has managed to pull together enough cash to avoid nonpayment, although it is not clear how long Greece could to continue to be saved.
Greece’s debt to the European Central Bank is also an issue and the finance minister of Greece stated on Thursday for ECB to push back the debt repayment since Greece’s debt is not reasonable. However, it is not an option because it fills the ECB Chief Mario Draghi’s “soul with fear” in Varoufakis’ words.
Varoufakis has stated in a conference in Athens “Over July-August the finance ministry will have to borrow 6.7 billion Euros from our partners in one way or the other to repay bonds from the SMP programme," referring to the bonds bought by the ECB under the Securities Market Programme in 2010-2011.
He also told the parliament that the President of the European Central Bank does not want to risk irritating Germany with such a debt swap and almost 27 billion Euros of bonds, which are still held by the ECB should be taken from there and the 6.7 billion Euros of bonds that is still not paid should be pushed back.
Varoufakis has stated a “swap.” “The idea of a swap between the Greek government and the ECB fills Mr. Draghi's soul with fear. Because you know, that Mr. Draghi is in a big struggle against the Bundesbank, which is fighting against QE. Mr. Weidmann in particular is opposing it,” says Varoufakis.
