Exclusive: Greece taps IMF reserves to pay IMF debt - sources

Yahoo News ^ | 5-12-2015 | Lefteris Papadimas and George Georgiopoulos

[tcrlaf]

Greece emptied an IMF holding account to repay 750 million euros ($840 million) due to the fund, a Greek central bank official said, avoiding default but underscoring the dire state of the country's finances.

With Athens close to running out of cash and a deal with its international creditors still elusive, there had been doubts about whether the leftist-led government would pay the IMF or opt to save cash to pay salaries and pensions later this month.

Greece, like all other International Monetary Fund members, holds reserves from the IMF that are denominated in Special Drawing Rights (SDR), a basket of international currencies. The reserves must be kept at a certain level or the country must pay interest if its holdings fall below its "allocation" of SDRs from the IMF.

A government official told Reuters that Athens used about 650 million euros from the SDR holdings account and 100 million euros from its cash reserves to make the payment on Monday.

[tcrlaf]

Using IMF loan money to make the IMF loan payment. That's like taking a credit card cash advance on the last of your available credit to pay the credit card bill.

Didn't the IMF claim just a month ago they wouldn't allow Greece to do that?

I guess the Ponzi has to go on. The two banks with the biggest exposure to Greek Debt are Allianz and Citi.

As I have said before, IMHO, the Greek debt will eventually be repaid by the U.S. Taxpayer.

[Opinionated Blowhard]

Witness the death throes of the Welfare State, where even the state uses one credit card to pay off another.

[taxcontrol]

Is it time to short Allianz and/or Citi? It sure sounds like it.

[tcrlaf]

“Is it time to short Allianz and/or Citi? It sure sounds like it.”

In a sane world, I’d likely say yes, but we no longer live in a sane world. In the Western World, the concept of “Market Price Discovery” is completely gone now.

The Credit Default swaps must NOT be allowed to unwind, too many global Elites would get crushed (Soros), so no matter how much of the muppets grandchildren’s money has to be spent to prevent it, will be.

Next up, Greece will be raiding local pension funds to pay national pensions.

IMHO, pay attention to what is happening in Greece, because the US is in just as bad shape.

[aegiscg47]

In an article from overseas earlier today I believe it said that one of the major Greek cities gave the government some of their cash reserves! Also, they're accumulating these funds by not paying contractors who are providing goods and services to the government, probably with a series of IOU's. Not good.

[catnipman]

“Following legislative changes, Greece has meanwhile gathered 600 million euros of local government and other public entity money”

Interesting concept that “gathering”. I wonder exactly what the nature of this “gathering” was? You don’t suppose it was actually some form of theft at the point of a gun hidden in a pocket, do you? Or maybe “gathering” simply means that they just walked around and picked up 600 million loose Euros laying around on the ground here and there, you know, soft of like gleaning a field after harvest. I leave it to the reader to decide.

[cherokee1]

The “gathering” sounds pretty much like what gov. Moonbeam Brown did in Kalifornia when he tapped local govt systems development reserves. Calling in all the aces they have left to play. It’s way easier than doing something productive and producing a useful/saleable product.

[Tzimisce]

“I’ll pay you back as soon as you lend me more money.”

-Calculon, ‘Futurama’

[BeauBo]

Many Contractors have not been paid by the Greek Government since January. The Government has spent all its cash reserves, and plans to continue spending more than they take in. As such, you could say that they are bankrupt now, but Governments have a special power to take.

They are looking to new sources for cash - finding things that can only be done once - and burning through them quickly.

They have ordered the confiscation of the cash accounts of local governments, and have already spent what was collected.

What they did with the IMF was way over the top (seizing the IMF’s own emergency money as a “loan” without asking, to make this month’s payment to the IMF on other loans). But they can’t do that again - that account was totally spent.

They are pretty much out of Government money to spend, so they will soon either have to default on some more obligations, or expropriate private money - unless foreigners trust them with freight trains worth of perfectly good new money.

If they can make it through May without a default, massive seizures of private property, or a bailout; that will be the last month where it is possible. They are running on fumes now.