Greece can survive debt deadlock until July, Credit Suisse says

Greece may not be as close to the financial abyss as earlier predicted and could possibly survive until July without further aid, Credit Suisse economists said on Friday.

“Greece is cash-strapped, and the situation is worsening. But despite the evident deterioration of the country’s liquidity position, we believe Greece can still survive, for another month or so, without external financial support,” they said in a note titled “Greece: Die another day”, out on Friday.

“And the government could stretch until July, if needed, when the ECB [loans] mature,” they added.

The comments came as the Eurogroup of eurozone finance ministers met in Riga on Friday, where Athens’s financial woes were on top of the agenda. The two sides — as expected — failed to reach an agreement, with head of the Eurogroup Jeroen warning time is running out for Greece.

The meeting had previously been touted as the deadline for Greece to hammer out a reform deal with its international lenders in order to unlock the next tranche of bailout funds and avoid running out of cash.

But the government has been able to source more cash than economists had predicted, and market participants have lost hope that a solution is imminent. On Monday, the Alexis Tsipras-led government ordered public bodies such as state-owned companies and public pension funds to transfer their cash reserves to the central bank. The move is seen as starving off Greece’s cash crunch for a few weeks, at least until a May 12 loan repayment to the International Monetary Fund.

“We give a low probability to a default event in the coming month and expect a (tentative) deal to be struck by June, at the latest. Greece has shown a clear resilience in recent months, given that no official cash has been disbursed to the country for the past eight months or so,” the Credit Suisse analysts said.