Gov’t eyeing bank support funds
The European Commission in Brussels decided yesterday to approve the operation of the Hellenic Financial Stability Fund, meant to support local banks, in accordance with European Union regulations – and Athens can’t wait to get its hands on it. The fund’s capital amounts to 10 billion euros and forms part of the financial support offered to Greece from the eurozone and the International Monetary Fund. «I am satisfied by the fact that the terms according to which Greece will be able to resort to the fund are in harmony with the regulations of the support programs for the financial sector in periods of crises,» EU Competition Commissioner Joaquin Almunia said yesterday. The first 5 billion euros has already been credited to the fund from the first installment from the EU and the IMF in May. The other half is expected to arrive this month with the second installment. However, after the inspection by Greece’s creditors in end-July to early August, the government has agreed not to credit the fund with all 5 billion euros this month but only a small part of that, with the rest to be used for other purposes by the state. Athens suggests that, until the end of this year, the banks will not need such funds, so there is no point in committing this amount of money at a time when other needs are greater. This way, the state will have secured an amount of ready cash during a period when its obligations are considerable and the markets are closed to it, as Greece will have to wait another three months before it can borrow money again. The Finance Ministry is hoping to close 2010 and start next year with the biggest possible cash amounts available in the state coffers so as to be able to handle any problems until the fourth installment, due in March.
