[Marxism] Greece requisitions spare cash in dash to stay solvent

Dayne Goodwin daynegoodwin at gmail.com
Tue Apr 21 01:18:55 MDT 2015

Greece requisitions spare cash in dash to stay solvent
by Renee Maltezou and George Georgiopoulos
Reuters, April 20

ATHENS - Greece ordered state entities from municipalities to a fund
meant for future generations to park idle cash at the central bank in
a scramble on Monday to pay its bills.
. . .
Monday's legislative order includes local administration but excludes
pension funds and some state-owned firms. Cash reserves that are
needed by these bodies for their immediate payment needs are also
excluded from the regulation.

Raising pressure on the government, local officials threatened to defy
the decision, which needs parliamentary approval. Most opposition
parties said the decision was arbitrary.
. . .
The latest effort to harness spare cash means parking money that a
public body does not need immediately at the Bank of Greece. The money
is lent to the debt agency for one to 15 days against collateral and
is paid back with interest at expiry.

Greek finance ministry officials told Reuters last week that Athens
will need to tap all the remaining cash reserves across its public
sector, a total of 2 billion euros ($2.2 billion), to pay civil
service wages and pensions at the end of the month. The finance
ministry denied this.

Greece must repay the International Monetary Fund almost 1 billion
euros due next month. Athens has said it wants to honor its debt
obligations but government officials have said that wages and pensions
would be a priority.

Tsipras needs to present detailed plans to reform the economy before a
meeting of euro zone finance ministers in Riga on April 24 to prevent
a default which could trigger a 'Grexit' from the euro.

The next regular Eurogroup meeting is on May 11, just a day before the
IMF requires a 750 million euro loan repayment.

On Monday, ECB Vice President Vitor Constancio said that a Greek exit
was not an option and that a default by a euro zone state would have
no automatic impact for its banks.

"We are convinced at the European Central Bank that there will be no
Greek exit. The Treaty does not foresee that a country can be
formally, legally expelled from the euro. We think it should not
happen," Constancio told lawmakers.

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