Mayors resist coalition’s demand to hand over cash reserves

Mayors insisted on Tuesday that they would not allow their municipalities’ cash reserves to be transferred to the Bank of Greece, as the government wants, at least until they have held a meeting with Prime Minister Alexis Tsipras.

During a stormy meeting of the Union of Municipalities (KEDE) yesterday, Alternate Finance Minister Dimitris Mardas was on the receiving end of heavy criticism from mayors over the government’s decision to introduce a legislative decree forcing local authorities to deposit their cash reserves at the Bank of Greece, from where the government can use them to cover debt payments. The decree is due to be voted through Parliament this week.

KEDE’s executive board approved a resolution calling on all municipalities to refuse to hand over the cash until a general meeting at which a final decision has been taken. KEDE representatives also want a face-to-face meeting with Tsipras. Thessaloniki Mayor Yiannis Boutaris was one of those who differentiated his position, saying he opposed the way the government had introduced the measure but that he also understood the pressing nature of its liquidity needs.

During the three-hour session, Mardas assured the mayors that they would not lose their cash, which will earn interest of 2.5 percent while deposited with the Bank of Greece. He said the money is needed so the government can meet all its obligations over the next few weeks. “We did not want to catch you by surprise but I assure you there was no other choice,” he said.

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