The government is facing the possibility of not being able to pay wages and salaries in October if its international creditors do not approve the pending 8-billion-euro sixth installment immediately.
The country’s foreign lenders have made disbursement conditional on the government’s adoption of new measures that will target the collection of at least 1.7 billion euros. Without the sixth tranche, the public purse will be 1.5 billion euros short on October 17.
The prospect of a freeze in payments appeared even more serious on Thursday, after Greek commercial banks failed to cover the sum of 300 million euros of supplementary, noncompetitive bids for Tuesday’s auction of T-bills, providing only 155 million. The shortfall is interpreted as a clear message by banks to the government that they are unwilling to fund future issues of T-bills…
Greek one year bonds are approaching 100% as the financial world fully expects a Greek default some time in the next 12 months – which means that Money is figuring there is nothing the European Union can do to avoid default. Money is right – there isn’t anything. Oh, they could maybe put it off for a while, but they can’t stop it. Greece owes too much money and no elective government of Greece would ever have popular support for bankrupting the people of Greece so that banksters can be bailed out (a dictatorship could do it…and one does wonder if the Euroweenies are considering that?).
And once Greece does default, look out! The financial world will be in for a crash like no one has ever seen before.
HAT TIP: Mish’s
UPDATE: More on the Eurocalypse.