Think Cyprus is the only country that will need a repeat bailout (as the FT reported earlier)? Think again. Cause heeeeere's Greece... again.... where as Kathimerini reports, a brand new, massive budget hole for €1.2 billion has just been "discovered." Only this time it is not some C-grade government service that can just be swept away: it is to fund the country's biggest healthcare provider, EOPYY [6]. And the deadline is imminent: Greece has less than a month to plug it.
From the Greek publication [7]:
The Health Ministry has less than a month to find ways to plug a funding gap of around 1.2 billion euros in the budget of the country’s biggest healthcare provider, EOPYY, following a meeting between representatives of the country’s creditors and Minister Andreas Lykourentzos on Monday.
“There are important issues still to be discussed, such as restructuring EOPYY and the issue of costs created by shortfalls from social security funds,” Lykourentzos said.
He added that the inspectors noted progress in curbing the costs of hospitals and in supplies, but he also said that spending on medicines still has some way to go to reach a set target of 2.44 billion euros by the end of the year from 2.8 billion in 2012.
Why are all these "funding shortfalls" coming out suddenly, two months before the German general election? Because Europe's periphery is now an expert in leverage, which is precisely why the budget holes are emerging at this moment.
Because if there is one time Angela Merkel is most vulnerable, it is right about now, and with an election to focus on, a crash in the EUR, and a repeat spike in bond yields in the European periphery, not to mention a test of the EFSF, the ESM, and of course, the non-existent OMT, is that last thing she would want on her mind. And, the insolvent thinking goes, any demands for extra cash issued now will be promptly met.
So: first Cyprus, now Greece. Who's next? Because now is the time to make demands from Mama Merkel.