Here is a modern day twist on “if a tree falls in the forest”…the insolvent Greek government could not make their debt payment due to the International Monetary Fund today, but so far, the bankers are not calling it a default.
The party line is that Greece is permitted to miss today’s €300 million payment by bundling all payments due in June into one €1.5 million lump sum on June 30. Of course, Greece doesn’t have the money for the larger payment either, but so far, the lenders involved are opting to whistle through that graveyard in the hopes of maintaining the facade that their bonds are solid assets, for just a little while longer.
While Greece may find some further credit to draw on for the month end lump to the IMF, they owe a further €5.2 billion to Treasury bill holders in June and €6.7 billion to the European Central Bank in July and August, and, and, and….See the full crushing inventory of Greek debt payments due here. All while the Greek economy officially slumped back into recession during the first quarter of 2015.
This is agony. Watching bankrupts continue borrowing to keep unsustainable spending alive is always gruesome to behold. Restructuring with large debt write-offs is the only way to restart on a financially feasible path. So far though, the Greek people have indentured their government with the impossible dual mandate of getting debt write-offs from their European creditors while also staying inside a common currency with them.
One of these days…the reality of the Greek bankruptcy will have to be acknowledged and over-valued financial assets in Greece and throughout their global creditors (banks and other governments) repriced accordingly. Until then, the officially sanctioned torture of the Greek people by their banker ‘advisers’ continues.