Greek international debt crisis will probably resurge in mid-April

After bailouts in 2010 and 2012, Greece is again edging towards financial collapse, because it needs to make large payments in April.  The government has been repaying some of its loans to the to the International Monetary Fund  (IMF), but it needs  to send about another 460 million euros next Thursday. In addition 1.7 billion euros needs to be paid for public sector wages and pensions before the end of April.

Tax revenues in January and February were 1.1 billion euros less than forecast.

Therefore the government possibly does not have enough cash to make the repayments to the IMF nor to pay its workers. It can theoretically issue bonds to borrow more money, but the interest rate it would need to pay is now over 10%.

Eurozone finance ministers agreed last month to extend Greece’s bailout program, but only on the condition that there are plans for economic reforms, such as privatisation and measures to stop tax evasion. Some of the measures contradict the newly-elected government’s anti-austerity commitments (an “austerity” policy is one which imposes a contractionary budget–cutting government spending and raising taxes-in order to reduce the budget deficit).


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