The Finance Ministry is on a mission to find resources with which to meet its upcoming obligations – its latest proposal being the compulsory submission of state entities’ cash reserves to the Bank of Greece – a measure that the prime minister’s office has not yet approved.
The ministry’s aim is to secure sustainable liquidity for the payment of salaries and pensions at the end of the month as well as the country’s dues to the International Monetary Fund in early May, because with each passing day it is becoming increasingly clear that there will be no deal with the eurozone by April 24, when, according to the ministry’s projections, the state’s cash reserves will run dry.
“Our main concern is managing to pay up when we have to,” Alternate Finance Minister Dimitris Mardas told a press conference on Thursday, stressing that “we do not rely on hypothetical scenarios.”
He added that when he was appointed to his post he was told that there would be a cash deficit of 552 million euros by February 24 and that salaries and pensions would not be payable that month. “However, since then, everything has been paid,” he stressed.
The ministry is also exploring other ways to bolster state revenues. This includes the legalization of undeclared capital and the settlement of expired debts, the latter of which is expected to bring in revenues of 600 million euros this year. Mardas went on to specify the five parameters that determine the state’s cash reserves: the economic climate, the revenue shortfall, the course of negotiations with the country’s creditors, alternative sources of funding, and a “sum of proposals” that include the compulsory handover of state entities’ cash reserves to the Bank of Greece.
The various general government entities’ cash reserves are estimated at 2.5 to 3 billion euros, most of which belongs to social security funds that have refrained from investing in repos to date.
“We can propose whatever we want; there is a government and the Parliament that make the decisions,” Mardas said in response to a question as to whether the law allows for the forced payment of state entity cash reserves to the central bank. He added that there is a law to that end which has not been applied since 1951, and that similar legislation exists and is adhered to in Britain, Portugal and the Netherlands.
Mardas further noted that the entities which have already invested their cash voluntarily will not lose their money, and cited the example of Attiko Metro, which had invested 400 million euros and in the last few days withdrew 150 million euros, gaining interest of 2.4 percent.