Greece denies readying IOUs to pay state wages, pensions

Greece's government today sharply denied a newspaper report that it was readying IOUs to pay public service pensions and salaries as the country's euro cash dries up.
The finance ministry in a statement flatly rejected the report in the Kathimerini daily, which cited unnamed sources, as "baseless".
It also said that such articles dangerously undermined the country at a crucial moment in its negotiations with international creditors to secure desperately-needed funding.
"There are several similar recent articles that have been contradicted by the facts," the ministry said.
Observers, however, believe Greece would have to issue IOUs if it does not win more emergency euro funding from the European Central Bank to recapitalise its banks depleted by clients rushing to get their money out.

The ECB so far has maintained its 89-billion-euro (USD 9-billion) ceiling on its Emergency Liquidity Assistance to Greece. The country needs more than that to meet withdrawal demand, even with capital controls that have closed banks and rationed ATM cash.
Deputy Finance Minister Dimitris Mardas yesterday reassured public servants that their wages due on July 13 would be paid without problem, thanks to what he said was good tax revenue.