Will Greece have until late July to come to an agreement with its creditors ?

Greece probably has until late July to come to an agreement with its creditors before potentially being forced out of the monetary union. Possible delays in payments to the International Monetary Fund in June shouldn’t prompt the European Central Bank to shut off vital liquidity to Greek banks. By contrast, a default on marketable debt — specifically the failure of the Greek government to pay 3.5 billion euros due to the ECB on July 20 — would probably force the central bank’s hand. The Greek government and its creditors are still likely to reach a deal on a list of reforms before that crucial date.June 5: Greece will have to make a payment of about 240 million SDRs to the IMF. That equals about 303 million euros. Greek Finance Minister Yanis Varoufakis has stated Greece will seal a deal with its creditors by this date. This is a medium-risk event. The raid from Greece’s own reserve account at the IMF to make a recent payment to the fund suggests the Syriza-led government is running out of cash to pay its creditors and will be unable to make this payment in the absence of additional bailout funds, though the immediate consequences of missing a payment to the IMF would be limited.June 12: Greece will have to make a payment of about 270 million SDRs to the IMF. That equals about 341 million euros. This is a medium-risk event, similar to June 5.

June 12: Greece must roll over 3.6 billion euros of Treasury bills. This is a low-risk event.

June 16: Greece will have to make a payment of about 451 million SDRs to the IMF. That equals about 568 million euros. This is a medium-risk event. (See June 5.)

June 18: The Eurogroup will meet. This seems like a low-risk event because the finance ministers would still be able to discuss Greece at their next meeting even if an agreement were to remain elusive.

June 19: Greece will have to make a payment of about 270 million SDRs to the IMF. That equals about 341 million euros. This is a medium-risk event. (See June 5.)

June 19: Greece must roll over 1.6 billion euros of Treasury bills. This is a low-risk event.

June 25-26: The European Council meets in Brussels. German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras could use this opportunity to speak about financial aid to Greece. The heads of governments could force their officials to move in a particular direction, though the finance ministers are the government representatives who have to sign an agreement. This seems like a low-risk event because the Eurogroup will meet again on July 13.

End-June: The extension expires for the “Master Financial Assistance Facility Agreement,” as Greece’s bailout is known. This will probably be a medium-risk event. If Greece were no longer officially in a bailout program, the ECB could decide to re-assess its collateral rules linked to Emergency Liquidity Assistance, though the most likely outcome of this soft — and arbitrary — deadline is an extension if an agreement remains elusive.

July 10: Greece must roll over 2 billion euros of Treasury bills. This is a low-risk event.

July 13: Greece will have to make a payment of about 360 million SDRs to the IMF. That equals about 454 million euros. This is a medium-risk event. (See June 5.)

July 13: The Eurogroup will meet. This will probably be a high-risk event because it is the last scheduled Eurogroup meeting ahead of the July 20 payment to the ECB. In other words, this may be the last opportunity for the finance ministers to agree on the disbursement of funds ahead of that date.

July 17: Greece must roll over 1 billion euros of Treasury bills. This is a low-risk event.

July 19 and 20: Greece must make the largest coupon payments of the month — about 199 million euros and 104 million euros, respectively — on government bonds. The total for the month is 810 million euros. In addition, Greece’s 3.5 billion-euro bond held by the ECB matures on July 20. This is a high-risk event. A default could cause the ECB to cut off Greek banks’ access to ELA. That would probably be the first step to an exit of the beleaguered country from the monetary union.

Aug. 1: Greece will have to make a payment of about 141 million SDRs to the IMF. That equals about 177 million euros. This is a medium-risk event. (See June 5.)

Aug. 7: Greece must roll over 1 billion euros of Treasury bills. This is a low-risk event.

Aug. 14: Greece must roll over 1.4 billion euros of Treasury bills. This is a low-risk event.

Aug. 20: Greece must make the largest coupon payment of the month — about 194 million euros — on government bonds. The total for the month is 211 million euros. In addition, Greece’s 3.2 billion-euro bond held by the ECB matures. The riskiness of these events is path-dependent. If Greece has managed to secure bailout funds by this date, the payment shouldn’t create a problem. If it hasn’t secured the funds, Greece will probably have defaulted on the July 20 payment already and this second payment might be immaterial. If Greece hasn’t secured bailout funds and managed to somehow make the July 20 payment, this would be a high-risk event.

This post is courtesy of Bloomberg Intelligence Economics.

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