Greece calls in cash from state agencies to help it stay afloat

Greece is dangerously close to running out of money and has issued an emergency decree ordering reserves from state agencies and municipal coffers.

Municipal leaders held a meeting today to discuss how to block the move with Athens Mayor Giorgos Kaminis said his municipality belies the decree is unconstitutional. The mayors debated taking legal action to hang onto their cash.

The dispute between Alex Tsipras' new government and its EU creditors goes down to the wire later this week, with the EU still holding out for better terms on the bailout.

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With an IMF payment soon due, the dispute has held up the payment of 7.2 billion euros ($7.7 billion) for the cash-strapped Greek government.

Eurozone finance ministers meet in the Latvian capital Riga on Friday with both sides saying time is running short to keep Greece afloat.

'Submission and surrender'

Greek Energy Minister Panagiotis Lafazanis said in a weekend interview that lenders were seeking "submission and surrender" from Greece and not a fair compromise.

Bond markets are reacting to the threat of a Greek default on loans, with borrowing costs spiking to 28 per cent on Monday.

Greece's stock market slid on Tuesday to its lowest level since the election of the anti-austerity budget.

Demanding state agencies return cash to the central bank buys time for the Tsipras government to negotiate more firmly with its lenders, perhaps until May of this year.

Greece had pledged to its eurozone partners in February that it would come up with an acceptable set of reforms by the end of April.

Tsipras will meet German Chancellor Angela Merkel at a European Union summit on migration on Thursday and the two are expected to discuss the funding crisis.

But with Germany resisting any loosening of Greece's terms, it's unlikely a deal will be reached this week.

Many deadlines pass

Now Eurozone finance ministers are saying it's counterproductive to set deadlines for Greece because the time limit leads to brinkmanship in negotiations.

"The use of deadlines, which leads to certain brinkmanship and unnecessary excitement, will not be done again," a senior EU official told Reuters.

On Tuesday, the Greek energy minister met with Alexei Miller, CEO of Russian gas supplier Gazprom, hoping for a deal to join a planned Russian-led gas pipeline project in the Black Sea. They are seeking a cash advance for participating in the venture.