If I recall correctly, the disbursement of the 31,2 BEUR tranche was originally due in June of this year. Remember, that was 3 months ago!
It was then postponed until September but September is now almost over. The last thing we hear is that there will be no action on Greece until Barack Obama is firmly re-installed for a second term as US President. That should mean no disbursement of the 31,2 BEUR until some time in November. By the way, that would be 5 months are the original date.
How does one live without 31,2 BEUR for 5 months? Particularly since fears were spread in June that Greece would run out of money “in a few weeks” if the 31,2 BEUR were not disbursed?
I have no idea and this only underlines the lack of transparency which is being demonstrated from all sides. In a normal restructuring, there would be a “sources & uses of funds” statement. It would show where the 31,2 BEUR come from, what they would be used for and when. If the sources are postponed, some of the uses have to be postponed. Which uses have been postponed since June as a result of the fact that the sources have been postponed?
The budget deficit is apparently quite a bit better than targeted, the primary deficit is almost marginal by now and the current account was in surplus in July. That probably helped Greece’s cash flow a bit but, please, not to the tune of 31,2 BEUR!
I presume that the bulk of the 31,2 BEUR is required to pay off maturing debt. That’s ok, but please remember that when European tax payers hear that Greece needs the 31,2 BEUR urgently, they think that Greece needs to urgently pay out 31,2 BEUR in comfortable pensions and other social benefits. It is only natural that they might conclude that Greece should cut pensions and social benefits.
Now, I have to assume that all the information about sources and uses of funds is on hand in secret Troika documentation. If it weren’t, that is to say if even the Troika didn’t understand the situation, then that would be really irresponsible.
But why does one not go public with that information? Why does one not explain in detail what Greece needs the money for? How much is for operational needs? How much for debt service? How much for financing deposit flight? Etc., etc.
If it turned out that the bulk of the money is needed for debt service and financing deposit flight, then the priorities would be to restructure debt service and contain deposit flight (instead of cutting pensions and social benefits).
Whichever way one slices it, credibility is not increased through such developments. And that is not only Greece’s but also the Troika’s credibility. And without credibility, there will never be much confidence (and without confidence, there will never be much money).