Greece may run out of money to pay basic government costs within a few weeks, if the elections on 17 June do not quickly produce a stable government.

That dire prediction comes from former Greek prime minister Lucas Papademos, who ran the “technocrat” caretaker government that stepped down after May's indecisive election.

'Drastic deterioration'

Papademos made his remarks in an eight-point memo to Greek president Karolos Papoulias, published in the newspaper To Vima. He says that by 20 June, the government may well have no funds of its own and will rely completely on aid from the European Union and the International Monetary Fund.

That could leave the government unable to pay salaries, pensions and other immediate cash obligations, Papademos warns. The EU and IMF are currently holding back €1bn in promised aid until a stable new government is formed in Athens.

Vicious cycle

The drain on the country's cash reserves is worsening in response to the fiscal crisis in Greece, and the eurozone in general. Spooked by growing talk of an impending “Grexit" and a crash re-introduction of the drachma, worried Greeks have pulled €3bn from their bank accounts since the 6 May election. Greek banks have seen a quarter of their deposits withdrawn over the past two years. That's also led to a booming burglary business, as those billions stashed under mattresses and buried in back yards have proven a tempting target for thieves.

All the talk of impending doom has led Greeks to hold off on paying taxes, electricity bills and other payments to the government: that has made the public cash crunch that much worse. In response, the government has suspended payments to suppliers and other short-term creditors. Businesses are increasingly unwilling to extend credit to each other for everyday transactions. Foreign companies are also insisting on immediate payment for goods and services supplied to Greek businesses.

In the next day or so, Greek banks expect to receive €18bn in EU bailout cash that's been held up for weeks amid the uncertainty following the election.

Read more: The Economist magazine draws a picture of a smaller, federated eurozone – after the seemingly inevitable Grexit.