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Greece will run out of money in July and its creditors can't agree on what to do

Business Insider UK logoBusiness Insider UK 17/02/2017 feedback@businessinsider.com (Ben Moshinsky)
A man waves a EU flag as pro-Euro protesters take part in a rally in front of the Parliament on June 22. 2015 in Athens, Greece. Thousends of people attended the rally in support of Greece remaining in the European Union. The Eurozone's 19 national leaders held an emergency summit in Brussels to discuss the crisis and welcomed new proposals from the Greek government after talks today to haul Athens back from the brink of bankruptcy. (Photo by )© Provided by Business Insider UK A man waves a EU flag as pro-Euro protesters take part in a rally in front of the Parliament on June 22. 2015 in Athens, Greece. Thousends of people attended the rally in support of Greece remaining in the European Union. The Eurozone's 19 national leaders held an emergency summit in Brussels to discuss the crisis and welcomed new proposals from the Greek government after talks today to haul Athens back from the brink of bankruptcy. (Photo by )

Eurozone countries look set to miss a self-imposed deadline next Monday to agree on aid measures for Greece, which risks running out of money in July. 

The Financial Times reported that European Union officials are doubtful that a squabble among the International Monetary Fund, the Greek government, and other European agencies, finance ministers, and officials can be resolved at a crunch meeting of European finance ministers on February 20.

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Meanwhile Eleni Chrepa at Bloomberg News cited an EU official as saying "this is going to be a very short meeting."

"It looks like we're moving to March right now," said Chrepa.

The eurozone had wanted to settle the dispute over how best to manage Greece's debt pile before the Dutch national elections in March, to avoid turning a financial problem into something more political.

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France and Germany are also due to hold elections later this year, meanwhile the UK will likely trigger Article 50 in March and start formal negotiations to leave the European Union, adding to the backdrop of political risk.

The looming crisis has Greece facing repayments of more than €6 billion in July that it is unlikely to be able to meet without help or restructuring. 

Here is the chart from Moody's:

greece2© Provided by Business Insider UK greece2

The disagreement centres on whether eurozone countries should ease their demands on Greece in return for a fresh bailout loan.

The IMF wants governments to sign off on debt relief for Greece and a halt to additional austerity measures for the country. Greece's national debt is on an unsustainable path and is liable to become "explosive," the fund said in a staff report this month, without more help.

The other euro-area governments disagree. More support for Greece is unpopular among voters and taxpayers, and, with elections looming, this is unlikely to change.

Germany's finance minister, Wolfgang Schauble, told a German TV station that writing off Greek debt would violate terms of the Lisbon Treaty, which binds European nations together.


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