PDMA to tap liquidity from state entities’ cash reserves
By Sotiris Nikas
The Finance Ministry announced on Tuesday that it will be issuing short-term debt to cover the cash needs of the state by drawing on some 3 billion euros of cash reserves found lying unused in the coffers of various state agencies.
According to the announcement, Alternate Finance Minister Christos Staikouras has authorized the Public Debt Management Agency to offer repurchase agreements (repos) to general government entities.
Ministry officials said that the government has been exploring for some time now how it could use the cash reserves of “general government entities” with the exception of social security funds, “when need and for a brief period of a few days.” They stressed that such agreements are mutually beneficial as government paper will be put up as collateral and will offer competitive interest rates. While this cash cannot cover the financing gap of Greece’s adjustment program, it will allow the state to bridge small cash gaps.