Local authorities insisted on Friday that they would not give in to the Interior Minister Nikos Voutsis’s demands for municipalities and regional authorities to transfer their cash reserves to the Bank of Greece, where they could be used for short-term borrowing by the government.
Voutsis wrote to KEDE, the union representing the local authorities, to urge them to abide by a legislative decree passed on April 20 requiring mayors and governors to transfer their cash reserves.
While some local officials complied, the union voted not to follow the legislation.
“Municipalities’ financial situation was bad and has got worse,” KEDE said in its response. “If they are forced to deposit [at the Bank of Greece] whatever cash reserves they have left, they could even have problems operating properly.”
KEDE also challenged the government to take the money itself and to “assume sole responsibility for the result of this decision.”