GREECE’S cash-strapped government has ordered reserves from state agencies to be placed in a basket account to help the country meet obligations, officials said Monday as bond market traders fretted over the risk of default.

    Following an emergency decree, which has been sent to parliament for ratification, the funds from anything from hospitals to local government will be moved to an account at the Bank of Greece to be made available for short-term loans to the state.

    The move is the latest sign that Athens’ coffers are running dry in the wake of the new left-wing government’s dispute with creditors over an economic reform program deemed necessary to get remaining bailout funds paid. The dispute has held up the payment of 7.2 billion euros (US$7.7 billion) from Greece’s international bailout, money it will most likely need to pay loans due over the coming few weeks.

    Greece’s lenders from the 19-country eurozone and International Monetary Fund are demanding reforms that include sweeping changes to pensions and labor rules. For Greece’s Syriza government, many of the demands are considered counter to its electoral mandate. Syriza was elected on a promise to bring an end to stifling austerity that many in the country blame for the severe economic hardship of the past few years.

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

    The impasse between Athens and creditors has ratcheted up fears that Greece will run out of money soon and leave the euro currency. That’s evident in the bond markets where Greek borrowing costs — a gauge of default risk — spiked higher once again Monday, with the rate on three-year bonds touching 28 percent.(SD-Agencies)