Greece to run out of money by August 20: crisis entering dangerous new stage

July 26, 2012 – GREECE – The beleaguered country will have to refinance billions of euros worth of government bonds in less than a month and requires international assistance — which may not be forthcoming — to repay the money. International inspectors arrived back in Greece on Tuesday to assess the country’s austerity program with European officials warning that it was “hugely off track.” David Cameron is now receiving daily written updates on the deteriorating situation and was warned earlier this week that a Greek bankruptcy in the next month is now a serious possibility. Official economic figures to be published today are expected to show that Britain suffered from a third successive quarter of negative economic growth — suggesting that the country is still in recession. If the figures are negative, it will be the longest double-dip recession for more than 50 years. Ministers are expected to blame the continuing economic turmoil in Europe for this country’s failure to recover from the last slump. One senior source said: “Europe is now paralyzing almost every economic initiative. “The daily analysis of the situation is filled with doom and gloom. Spain is in turmoil and Greece may run out of money by Aug 20.” The crisis has dropped down the political agenda in this country, but behind the scenes it is still the major issue facing Whitehall officials and the Prime Minister as problems once again come to a head. International Monetary Fund experts arrived back in Greece this week but may be reluctant to authorize the release of further funds to the new government without seeing evidence that the country’s austerity program is progressing. There are also growing fears that Spain will soon need a full-scale bail-out after its government borrowing costs rose above seven per cent this week. Reports in Spain on Tuesday said the country had not ruled out leaving the euro. The cost of Italian borrowing has also risen to the highest level since Mario Monti took over from Silvio Berlusconi as the country’s prime minister last autumn. On Tuesday, credit ratings agency Moody’s warned that it may cut the creditworthiness of Germany amid renewed concerns it will have to bail out southern European countries. The eurozone crisis is entering a dangerous new phase, as most European leaders are preparing for lengthy summer breaks. Mr. Cameron is expected to be on holiday on Aug 20 and now faces the prospect of a second successive interrupted summer break. –Telegraph