The Greek government is to borrow 7.3 billion euros from public fund reserves to repay installments due to the European Commission, the European Central Bank and the International Monetary Fund.
On Thursday evening, amid political tensions, the council of the Attica Region decided to lend Greece’s central bank, the Bank of Greece, 80 million euros from its fund reserves. The Attica Region is the richest region with 343 million euros in its fund.
At the same time, the Manpower Employment Organization (OAED) decided to transfer 120 million euros from its fund to the Bank of Greece with the option to turn them into state repos.
By adding regions to the list of lenders to the state, the finance ministry can draw up to 7.3 billion euros for its financing needs.
So far, the finance ministry has secured 5.5 billion euros from security fund reserves and expects to draw another 1.5 billion euros from public utility companies fund reserves which will be invested in Treasury bills.
The ECB and the Bank of Greece have stuck to a limit of 3.5billion euros on the amount of T-bills that lenders can use as collateral for central bank cash. Thereby, Greece’s turn to assets of the narrow and broader public sector for liquidity was inevitable.
However, internal borrowing has certain limits. Creditors are waiting for the Greek government to come up with a comprehensive list of reforms and proof that those will be implemented. Athens must rush to have the list of proposed reforms ready by Monday so that the reforms are evaluated and further financial aid is released.
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