Greece is back haunting Credit, despite the February agreement and the various IMF tranche payments recently. The key reason is that Greece is running out of cash – they had to raid various public funds to pay the IMF tranches in March – and increasingly being pushed to the wall. While Germany continues to act as good cop (Mrs. Merkel) and bad cop (Mr. Schauble), Greece continues to negotiate for an early disbursal of the Eurogroup money – the SMP gains of €1.9bn are the key target of the total €7.2bn for Greece.
The first bottleneck is likely to be the next IMF payment on 9 April for €400mn. Thus, we have two weeks for Greece and the Eurogroup to agree upon a plan of action. Mr. Tsipras could go to the wire as he could then extract the best deal while also showing his extreme left wing colleagues that he has tried his best. In fact, there is a possibility that Greece could request the IMF for a grace period showing the progress of negotiations as well as pointing out that they have a liquidity problem and not a solvency problem. That way the payment date could be extended by probably another 2-3 weeks and Greece can buy time until the last week of April.
