ECONOMY

State heeds Wieser on use of reserves

Euro Working Group (EWG) head Thomas Wieser has called on Athens to make the most of its available cash reserves in order to repay the state’s dues, while Labor Ministry sources have confirmed that an amendment will soon secure the state the right to use social security funds’ reserves.

Wieser stated on Wednesday on Austrian state TV that Greece has cash for the next few weeks and months: “reserves in the budget, reserves in the social security funds, reserves in state corporations.” He effectively advised the Greek authorities to utilize those reserves to cover the country’s needs given that there seems to be no intention on the part of the eurozone to disburse any bailout installments to Athens at this point.

The EWG head added that a complete package of reforms will have to be processed first before the money comes to Greece as this serves the mutual interest to which the Greek government “cannot turn a blind eye.”

Wieser appeared optimistic that once the April-July obstacles are cleared, which he considers possible, the situation in Greece will start to improve constantly after August. He said that servicing the Greek debt will be “very easy indeed” and criticized the previous Greek government for not promoting all the necessary reforms, before adding that more reforms and liberalization steps are required.

Meanwhile the state’s three-month treasury bill issue was covered on Wednesday, drawing 1.3 billion euros that will reach the required 1.6 billion on Thursday with the supplementary offers. That was meant to cover the T-bills maturing on Friday, but the interest rate rose from 2.5 percent last month to 2.7 percent.

Given that commercial banks have reached their T-bill purchase limit and are only recycling those they already possess, the remainder of the issue is being covered by the Bank of Greece, which is using the disposable cash of other state entities. However even the central bank’s government debt holdings are piling up, as the BoG already has more than 2 billion euros in T-bills.