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Greece Dismisses Rumors About Preparing IOUs to Pay Pensions

eurosThe Greek Finance Ministry dismissed a recent news article, which claimed that the government was preparing to pay state pensions with IOUs.
The Greek newspaper Kathimerini, noted that Greeceā€™s General Accounting Office was preparing to issue a second currency (IOUs), to pay state pensions and wages in July, citing unidentified sources. However, this was allegedly a last resort measure in case the government was not able to reach an agreement with the countryā€™s creditors by the end of the month.
ā€œThe report is totally baseless. Such reports are directed against the country and considered dangerous at a time when negotiations with creditors partners are at a crucial point,ā€ noted the Greek Finance Ministry in its official statement.
An IOU is usually an informal document acknowledging debt, specifying the debtor, the amount owed, and sometimes the creditor. IOUs may be signed or carry distinguishing marks or designs to ensure authenticity. In some cases, IOUs may be redeemable for a specific product or service rather than a quantity of currency, constituting a form of scrip.
The U.S. state of California issued official IOUs, also known as registered warrants, which specify a future payment date, is meant to differentiate these IOUs from regular, or ā€œnormalā€ payroll warrants which permit the holder to exchange their warrant for cash immediately. For both types of warrants, redeeming them may be delayed until funds are available. Because of this uncertainty, warrants are not negotiable instruments.

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