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Tuesday, October 4, 2011

Greece's government has enough cash to continue operating until the middle of November

By Alkman Granitsas and Stelios Bouras

ATHENS (Dow Jones)--Greece's government has enough cash to continue operating until the middle of November, the country's finance minister said Tuesday, despite facing an apparent delay in the disbursement of the next tranche of promised aid.

"Until mid-November there is no problem," Evangelos Venizelos said at a news conference. "We have done a cash flow forecast and our estimates are secure."

In a lengthy meeting of euro-zone finance ministers in Luxembourg Monday, the ministers decided to put off a decision on whether to approve an EUR8 billion payment to Greece until later in October, and beyond an informal deadline originally set for Oct. 13.

In previous remarks, Greek government officials have warned that the country was only weeks away from running out of cash and that cash reserves would only last until the middle of October.

Fears that Greece could face imminent default have rocked world financial markets in recent weeks and continued to unsettle investors Tuesday.

In afternoon trading, all major European bourses were showing heavy losses with the Athens bourse's benchmark general index plunging some 6.7% at about 1400 GMT. This weakness is also expected to spill over into U.S. markets when they open later Tuesday.

But Venizelos played down those fears, saying Greece will continue to meet all its debt obligations in full, and that euro-zone finance ministers were "impressed" with the austerity measures the country has taken to narrow its budget deficit.

"The basic messages from the eurogroup meeting is, firstly, that the banking system is absolutely secure, this relates to European and Greek banks. Secondly, Greece is, and always will be, in the euro and, thirdly, there is no talk of default," Venizelos said.

His remarks come two days after Greece disclosed that it would miss its budget targets for this year, forecasting a 2011 deficit of 8.5% of gross domestic product, or about EUR18.69 billion--well above a previous target of EUR17.1 billion.

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