Despite reaching a ‘deal’ with Eurogroup there is an immediate danger of Greek funds drying up and imminent bankruptcy lurking around the corner due to a gaping fiscal gap in the Greek economy. Just a day after the agreement for a four-month extension to the bailout program, the government is meeting to discuss where the funding required for the country’s running financial needs will be found to meet obligations for debt repayments, wages, pensions and public sector supplies.

A government source confirmed on Tuesday that the government is treading on “unchartered territory” without any guarantees of success. The government has just two weeks to find a solution to state funding needs. After the Eurogroup agreement, the government essentially is still in the program so as not to lose the umbrella of protection that its international creditors offer. The installments that are connected with the completion of the new review won’t take place before April under exceptional circumstances.

Old and new solutions are being reviewed in the hope that they hold keys to finding a solution by March 9 at the latest. The government has called for the European Central Bank to release 1.9 bln euros worth of profit from Greek bonds being held. This money that is being held for Greece would be enough to pay the 1.6-bln-euro installment owed to the International Monetary Fund (IMF) in March if it is released immiedately.

Primary surplus targets are already off track due to delays in the application of a budget that has resulted in delays to tax revenue and from privatizations. Reserve funds are minimal and cannot be used except in moments of great need to pay wages and pensions. The public sector is pumping liquidity by turning the fund surpluses into fortnightly sections to finance state needs. This solution is considered marginal and otehr solutions are being found, such as borrowing 4-5 bln euros, even 10 bln euros, over the coming months and issuing T-bonds beyond those that are programmed (the platform of 15 bln euros has already been reached).

Alternately, Greece can ask for the rolling over of some payments towards institutions such as the IMF in March or the ECB in April, but this would lead to the aggravation of the problem by the summer period as bonds terminate and many billions of euros would need to be payed out.