The Greek government is trying to find ways to secure liquidity until June without pension and salary cuts or extra contributions to security funds.
With Monday’s Eurogroup approaching, Greece’s partners increase pressure through the European Central Bank. The Greek government is trying to buy time for the negotiations and will make efforts to find a political solution in Monday’s meeting of euro zone finance ministers.
The finance ministry is looking for ways to secure liquidity until June so Athens can go to the negotiations table with strong negotiating tools.
However, the ECB has shut down funding to Greece and the Greek government is looking for alternatives. On Wednesday evening the cabinet had a long meeting to decide on ways to increase liquidity avoiding pension and salary cuts or extra contributions to security funds. According to an anonymous government source, Greek officials are looking at two solutions.
The first is old and tried: the state will stop payments to the private sector for a while. This way it can utilize every euro available in the state purse.
The second is to continue internal borrowing along the lines of the Payment and Control Agency for Guidance and Guarantee Community Aid (OPEKEPE), an authority which is supervised by the Ministry of Rural Development and Food. Since security funds are state operated, the money available can be used by the government if there is a liquidity emergency.
At the same time, the finance ministry team will try to get a political decision from the Eurogroup that will give the green light to the ECB to release some funds so that the state purse can breathe without the need for additional measures.
Bank of Greece governor Yiannis Stournaras is in negotiations with the ECB so that in Monday’s Eurogroup there is a green light for the disbursement of at least a part of the 7.2 billion euro tranche.
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