Government asks utilities to lend it some cash
The government has called on major public corporations, including utilities, to invest their cash reserves in state debt, along the lines of the proposal made to social security funds and other state entities.
This new move forms part of the Finance Ministry’s efforts to find cash and cover the state’s pressing needs. Sources say that the government has informed the main utilities (EYDAP, OTE, PPC etc) about the options they have to invest in short-term state securities (such as repos) with favorable yields under the circumstances. This is similar to the offer made to social security funds, although the latter have resisted placing their money in state debt for now even though the state has guaranteed that it will cover any losses they may incur.
The representatives of the various entities on social security funds’ governing boards are beginning to express opposition to the transfer of their cash reserves to the Bank of Greece. The ministries of Labor and Economy have even proceeded to make improvements to the clause that Parliament voted on to make it clear that the transfer will only take place upon a decision by the funds’ boards.
The unions and other entities represented in the funds stressed to Alternate Minister for Social Security Dimitris Stratoulis on Wednesday that they are opposed to the government’s utilization of their reserves and that the government has to proceed to the legislative acts that will implement all the election pledges for the strengthening of the pension funds.
Meanwhile the state’s cash reserves are running out fast and will continue to do so as long as there is no end to the negotiations between Athens and its creditors. On Friday the state will have to pay another installment to the International Monetary Fund (the fourth and final for March), amounting to 350 million euros. The next tranche to the IMF is due on April 9, totaling 410 million.
This tight situation in the state’s liquidity and the inconclusive talks with the creditors have multiplied concerns among investors. It is no coincidence that the yield of the three-year Greek state bond soared above 20 percent on Wednesday, while not a single transaction of Greek bonds was recorded yesterday on the electronic secondary market.
