Denials Mount as Greece Robs Peter to Pay Paul; Shell Games and Check Kiting

Denials in Greece about its sorry state of affairs are now so ridiculous that even some ardent Greek supporters are likely laughing out loud (off the record of course).

Please consider Greece Scrapes Bottom of Barrel in Hunt for Cash to Stay Afloat.

Greece will need to tap all the remaining cash reserves across its public sector -- a total of 2 billion euros ($2.16 billion) -- to pay civil service wages and pensions at the end of the month, according to finance ministry officials.

Greece's finance ministry denied that it would need to tap remaining cash reserves to meet salary payments, without providing any figures.

"News agencies' reports that refer to the state's cash reserves are groundless, we categorically deny them," the ministry said in a short statement on Friday.

"This is the last bit of cash that the Greek state has," a senior finance ministry official, who requested anonymity, told Reuters.

For months, the government has been borrowing from different parts of the state administration, including the Athens subway system, to pay the wages and pensions of public sector workers. Now, however, it is reaching the end of the line.

Finance ministry officials say the state's cash balance will be negative from April 20 if the government does not extract the 2 billion euros in cash deposits remaining in various public bodies, including a handful of pension funds and regional administrations.

Without that money, the state would be 1.6 billion euros short of what it needs to pay month-end salaries and wages.

Regular tax revenues, which start flowing in early in the month, should help the state's financial position of course. Tax revenues had begun to slip early in the year, when Tsipras' government was elected, but have stabilized since to around 4 billion euros a month.

Still, the financial pressure will not subside because Athens faces a new round of payments to the IMF next month. It needs to give the IMF 950 million euros by May 12 -- then domestic commitments kick in once again.

Shell Games and Check Kiting 

One can only keep these rob Peter to Pay Paul shell games going so long.  Eventually they always blow up. Of course, if Greece convinces creditors to lend it more money, or if the Troika decides to unleash more funds, perhaps Greece can make it until June.

None of those seem likely to say the least. And even if Greece pulls off one more shell game miracle, this will all blow up in June anyway unless tax revenue soars between now and then.

The game in play at the moment is for the Greek government to lay the blame for Grexit on the Troika. That is still possible if the ECB cuts off funding or imposes capital controls.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot