Brussels, 24/03/2015 (Agence Europe) - The euro working group, the preparatory body of the Eurogroup, is to meet on Wednesday 25 March, to take stock on the state of the Greek public finances and the state of play with technical discussions between Greece and the institutional trio (Commission, ECB and IMF).
One of the questions which could be up for discussion, according to the Greek press, is the country's request to be repaid €1.2 billion returned by the Hellenic Financial Stability Fund (HFSF) to the European Financial Stability Fund (EFSF) in the framework of the Eurogroup agreement of 20 February extending the financial assistance framework agreement for Greece by four months. Under this agreement, the HFSF returned the money which was not used for bank recapitalisation; however, the money remains available in the EFSF in case it is needed by the banking sector. Greece borrowed €49.7 billion for its banks and used €40 billion of this money. However, instead of paying €9.7 billion back to the EFSF, it paid back €10.9 billion. Greece would therefore like to get €1.2 billion back. An EFSF spokesperson said that the President of the Eurogroup, Jeroen Dijsselbloem, had tasked the EFSF with preparing an analysis of the issue. He has also asked the chair of the euro working group, Thomas Wieser, to take up the issue at short notice.
The fact remains that this money is available in bonds and can only be used for the requirements of the banks, although the Greek government is hoping to use it for its own financing. Theoretically, one option which is believed to be possible, but has not yet been discussed, would be for the government to make a proposal to the banks to exchange these bonds for the cash previously supplied to them by the government.
The eurozone appears inclined to make the money available, but it will probably also be linked to a commitment on reforms, an exhaustive list of which is to be submitted by the Greeks no later than Monday 30 March, according to statements by the Greek government spokesperson, Gabriel Sakellaridis, on the television channel Mega TV.
The president of the European Parliament, Martin Schulz, said in an interview with the Italian newspaper La Repubblica that he believes that “by the end of the week, we will reach a new understanding that will be enough to unblock the most urgent funds”. Speculation is rife as to the date on which the Greek coffers will be empty. On Tuesday, Reuters reported that it would be 20 April, but last week, certain sources were referring to 8 April or the very beginning of May. One thing is for certain: time is of the essence.
Minds seem to have been set to rest following the meeting between the German Chancellor, Angela Merkel, and the Greek Prime Minister, Alexis Tsipras, on Monday evening. Many saw it as a sign of Merkel's determination to stand by Greece. At a press conference with Tsipras, Merkel said that the meeting had shown an “appetite for cooperation”. Tsipras called on his audience to “overlook the stereotypes”. “The Greeks are not lazy and the Germans are not responsible for all Greece's troubles”, he explained. “We want an economically strong Greece. I think that we agree on the need for structural reforms and an effective administration in order to achieve this”, Angela Merkel said. (Elodie Lamer)