Gov’t spreads net in search for cash from state bodies

A few days after issuing a decree obliging state companies to hand over their cash reserves to the state, Finance Ministry officials on Wednesday sought to spread the net as wide as possible to ensure authorities can pay civil servants’ salaries and pensions this month.

Comments early on Wednesday by Alternate Finance Minister Dimitris Mardas, referring to a deficit of 400 million euros, fueled concerns. But just over an hour later, Mardas said that shortfall would be covered by cash reserves offered by pension funds and other bodies. In comments to Kathimerini, Mardas said authorities were “making an effort to enforce the law in order to secure the greatest possible liquidity for the needs of the Greek economy.” He was referring to a decree issued on Monday that obliges state bodies, with the exception of pension funds, to hand over their cash reserves to the Bank of Greece. According to sources, officials are in touch with public bodies – such as the Public Power Corporation (PPC) and the Athens Water Supply and Sewerage Company (EYDAP), as well as the pension funds said to have pledged to cover the 400-million-euro shortfall – to ensure the money enters state coffers as soon as possible. State hospitals and universities will not be exempt. On Friday officials are to reach out to the Public Gas Corporation (DEPA) and the natural gas grid operator DESFA. The situation is so dire that officials are also said to be eyeing the dividends of state bodies. Overall, authorities believe some 2.5 billion euros can be raised through public bodies’ cash reserves.

The state’s imminent obligations include 1.9 billion euros in pensions and salaries which must be paid between Friday and April 30. In May, the state will need nearly 2.5 billion euros to cover the wage and pension bill and faces repayments of 1.3 billion euros to the International Monetary Fund. Speaking to Ireland’s state broadcaster RTE, Economy Minister Giorgos Stathakis said the non-payment of debts was “out of the question” as it would “cause massive upheaval in the Greek economy.”

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