Thursday, 23 April 2015

Greece hopes for 2.5 billion euros from state entities

In World Economy News 23/04/2015

Greece hopes to get 2.5 billion euros (1.79 billion pounds) by forcing public entities to lend to the state, giving it enough room to meet its obligations through the end of May, the deputy finance minister said on Wednesday.
Shut out of bond markets, Athens is on the verge of bankruptcy and could run out of cash in weeks unless it strikes a deal with foreign creditors to unlock further bailout aid.
Prime Minister Alexis Tsipras’s administration on Monday ordered state entities and local governments to park idle cash at the central bank for the state to borrow, triggering an outcry from mayors and regional officials who have threatened to challenge it in court.
“My target is 2.5 billion euros,” Deputy Finance Minister Dimitris Mardas told Greece’s Star TV channel.
“I want this 2.5 billion euros to cover any needs that may occur, I repeat, taking into account the worst case scenarios and the needs for May.”
There have been doubts about whether Greece can make a loan repayment to the IMF on May 12 without a deal with creditors.
Mardas initially said that the state was still short of 350-400 million euros to cover wage, pension and other payments at the end of April but later said that hurdle had been overcome because some pension funds had since come forward to lend money to the state.
He also dismissed a report that Athens was considering a parallel currency or IOUs to make payments, saying he was confident a deal would be struck with creditors to avoid a default.
“There will be a positive outcome and this asphyxiation will end,” he said. “We are not contemplating such a scenario for now because we believe that we will reach a deal.”
Euro zone officials have said that talks are not advanced enough to reach a solution and have urged Greece to step up efforts to strike an agreement with its international creditors.
A meeting of euro zone finance ministers in Riga on Friday is no longer expected to culminate in a deal after European and IMF creditors accused Athens of failing to provide required data.
Athens said it was not to blame for the standoff.
“They can’t just drag their feet on a solution and blame the Greek government of slowing down the process,” government spokesman Gabriel Sakellaridis told the Ant1 television channel.
Tsipras is due to meet German Chancellor Angela Merkel on the sidelines of an EU summit in Brussels on Thursday and Greek officials have expressed hope the meeting could trigger a breakthrough in the negotiations.
“The Greek side is willing to make these important steps for a mutual compromise, a mutually beneficial solution, but there must be a solution soon,” said Sakellaridis.
“The legislative act is aimed at dealing with the liquidity issues. It is known that we are short of money.”

Source: Reuters (Reporting by Angeliki Koutantou and Renee Maltezou; Editing by Deepa Babington and Andrew Heavens)