Greece ordered its public sector operations yesterday to transfer idle cash to the central bank in a scramble to meets its needs in the run-up to IMF loan repayments next month.

Greece has been tapping into the cash reserves of pension funds and other public money in temporary transactions.

The latest demand shows how extreme the financial constraints on Greek Prime Minister Alexis Tsipras have become as he tries to persuade foreign creditors to extend new financial aid.

Yesterday’s legislative order excludes pension funds and some state-owned firms. Cash reserves that are needed by these bodies for their immediate payment needs are also excluded from the regulation.

There are still some billions of euros in cash reserves parked in banks

“This is a pre-emptive move to ensure that they will be able to secure as much liquidity as possible because of the squeeze,” an Athens-based analyst told Reuters. “There are still some billions of euros in cash reserves parked in banks by state entities.” In such transactions, a government entity parks cash it does not need immediately at the Bank of Greece. The money is lent to the debt agency for one to 15 days against collateral and is paid back with interest at expiry. Greek finance ministry officials told Reuters last week that Greece will need to tap all the remaining cash reserves across its public sector – a total of two billion euros – to pay civil service wages and pensions at the end of the month. The finance ministry denied this.

Greece must repay the International Monetary Fund almost one billion euros due next month. Athens has said it wants to honour its debt obligations but government officials have said that paying civil service wages and pensions would be a priority.

Tsipras is hopeful he can convince Greece’s creditors to unlock the funds Athens needs. But to prevent a default or ‘Grexit’ from the euro, he needs to present detailed plans to reform the economy. International lenders have so far deemed Athens’s offerings inadequate.

ECB Vice President Vitor Constancio said yesterday that a Greek exit was not an option, adding that a default by a eurozone state would have no automatic impact for its banks.

“We are convinced at the European Central Bank that there will be no Greek exit. The Treaty does not foresee that a country can be formally, legally expelled from the euro.We think it should not happen,” Constancio told lawmakers.