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Greek Municipalities Oppose Govt Plans to Use Their Funds

Greek municipalities held an emergency meeting earlier today in Athens after the government ordered the country’s public sector operations to transfer excess funds in a common account to the Bank of Greece (BoG) in a dramatic attempt to cover its needs ahead of the upcoming International Monetary Fund (IMF) loan repayments in May. On his behalf, Athens Mayor Giorgos Kaminis said his municipality would argue the legislative order is unconstitutional and a number of other mayors from across Greece have declared they are considering legal action. At the same time, opposition parties have expressed their outrage.

Thessaloniki Mayor Giannis Boutaris strongly criticized the decision after a local council meeting last night, raised an issue of lack of information and highlighted that the municipalities are now facing a severe problem with the economic demands of their suppliers who are now in a hurry to ensure payment. In a similar tone, Patras Mayor Kostas Peletidis expressed his opposition to the transfer of cash flow. As he said, “the rapture of the reserves will worsen the lives of tens of thousands of families in our municipality.”

Yesterday, Central Union of Municipalities and Communities of Greece (KEDE) President and Maroussi Mayor Giorgos Patoulis denounced the government’s decision, stressing that it directly affects the institution’s independence, overturns municipal planning, jeopardizes the financing of their services and questions their ability to meet staff salaries in the coming months.

KEDE called the Greek government to reverse its decision and announced it is determined to proceed to dynamic mobilizations and appeal directly to the Council of State to annul the decision.

Athens has been tapping into the public money reserves in temporary transactions in what is seen by analysts as a sample of the country’s desperate need of fresh funds, amid the SYRIZA-led government’s attempt to convince international creditors to unlock further financial aid. The Greek government has repeatedly declared it will honor its obligations to international creditors but at the same time senior government officials have distinguished the wages’ and pensions’ timely payment as a priority.

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