Off the wire
• Chinese premier meets Swedish counterpart  • China tames Mongolia 5-0 in first match of AFC U-23 qualifiers  • Vietnam, Germany vow to deepen bilateral ties  • Latvia's airBaltic to toughen security after Germanwings crash  • Commentary: Transparency of strategy to replace strategic deterrence  • U.S. stocks open narrowly higher  • Feature: Cycling "growing trend" to avoid traffic jams in Damascus  • Pakistan says no decision made to take part in Saudi-Yemen conflict  • China ties Haiti 2-2 at soccer friendly  • Sierra Leone launches campaign for "zero Ebola infection"  
You are here: 　 Home

Greek gov't turns to state entities' cash reserves to avert credit crunch in April

Xinhua, March 27, 2015 Adjust font size:

Greece's government has turned to the cash reserves of state entities and managed to secure enough funds this week to avert a looming cash crunch in April, local media reported Friday.

The Region of Attica and the Manpower Employment Agency OAED, which manages employment subsidy programs, have already approved the transfer of a total of 200 million euros (216 million U.S. dollars) of their cash reserves to Bank of Greece accounts to boost the state's cash resources.

The Region of Attica argued in a statement that the transfer of about 110 million euros of its reserves, in 99 commercial bank accounts, would offer higher returns, Greek national news agency AMNA reported.

The decision came as the government has been seeking ways to boost its cash resources to meet imminent financial obligations as state coffers run out of funds with no international financial aid for months.

After the Eurogroup Feb. 20 agreement and talks with European partners during the EU summit last week, Athens needs to present creditors a detailed list of structural reforms in the coming days to secure further loans in April to stay afloat.

According to Greek government spokesman Gavriil Sakellaridis, the list could be submitted by Monday for examination by an emergency Eurogroup meeting next week.

Meanwhile, the liquidity issue has been increasingly pressuring the newly-elected Leftist government.

The Greek state managed to repay maturing debt to the International Monetary Fund during March to avert a credit event. But over the next two weeks, Greece needs to pay about 2 billion euros in pensions and salaries and another IMF installment on April 9.

In the context of efforts to collect cash, the government has proposed to state entities, utilities and social security funds to lend their cash reserves and invest them in state debt in exchange of higher interest rates. However, it seems the idea has not received a warm welcome.

The government's liquidity problem has been worsened as tax revenues plunged in recent months and deposit outflows dramatically increase in parallel to economic uncertainty.

In January and February this year, some 20 billion euros were withdrawn from the Greek banking system, according to latest data from the Bank of Greece. (1 euro = 1.08 U.S. dollars) Endit