The Greek government is using cash surpluses deposited by public sector entities to pay its bills because delays on a bailout review have stopped funds from international lenders being disbursed, officials said on Tuesday.
Shut out of debt markets and with aid from its official lenders frozen, Greece has borrowed the cash that institutions such as schools, hospitals and utilities must deposit with the central bank if they do not immediately need it.
The government has used between roughly 9 and 10 billion euros through repurchase agreements since last year, most of which has been rolled over, officials said.
“The situation is not pleasant but not as dramatic as last year,” said one government official, who declined to be named.
“But the more time passes without concluding the review, we could find ourselves with our backs against the wall.”
“The cash earned an annual 3.7 percent on average in the second half of last year and the return during the first half of 2016 is similar, better than what the entities would have been earning from commercial banks,” a second official said.