ECONOMY

Greece to ask EFSF for return of 1.2 bln

The government is preparing to submit a request to the European Financial Stability Facility (EFSF) for the return of 1.2 billion euros.

According to the February 20 Eurogroup agreement, the Hellenic Financial Stability Fund (HFSF) was supposed to return the funds it did not utilize for the recapitalization of Greek banks. To that end it had borrowed 49.7 billion euros and used 40 billion. Instead of returning 9.7 billion it gave 10.9 billion euros back to the EFSF, or the exact value of the EFSF bonds it had. Therefore the government believes it has realistic grounds to demand the return of the extra 1.2 billion euros.

The difference stems from the fact that the Greek bank bailout fund had borrowed 1.5 billion euros in cash and 48.2 billion in EFSF bonds. Sources say that the HFSF used the cash at the start of the recapitalization process and then the bonds.

However officials familiar with the matter are not taking the return of the 1.2 billion euros for granted, saying it forms part of the general context of the country’s negotiations with its creditors. They do believe the return of that amount is possible and even expect it within April, which would be a welcome boost for state coffers given that the country’s cash reserves are only see lasting up to the end of March.

Meanwhile, HFSF chairman Christos Sklavounis reportedly tendered his resignation on Monday and the Finance Ministry will have to propose a successor for approval by the Euro Working Group.