Greek claim to cash rejected by Euro officials

Chris Papadopoullos
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THE GREEK government left a meeting of Eurozone officials empty handed yesterday after hoping to secure €1.2bn (£880m) partly to alleviate its cash problems.

Greece claims it had overpaid when the fund it used for bank recapitalisation was returned to the main fund that the Eurozone used collectively for emergencies.

However, a spokesman for finance minister Yanis Varoufakis told City A.M. there “wasn’t a final decision on the problem”, which means the funds could still be released in future.

Greece will now rush to submit a list of reforms to Eurozone finance ministers by Monday in the latest bid to unlock extra emergency cash from Europe. David Folkerts-Landau, chief economist at Deutsche Bank has said Greece could be tipped into default by a €460m repayment to the International Monetary Fund due on 9 April.

In February, Athens handed over the remaining €10.9bn worth of bonds in the fund it used to capitalise its banks during the financial crisis – Hellenic Financial Stability Fund (HFSF). It handed them back to the Eurozone’s collective crisis fund – the European Finan­cial Stability Facility (EFSF).

But Greece claims €1.2bn of this was overpaid due to the actions of the previous government, which used the HFSF’s cash reserves to settle some minor operations instead of the bonds.

The Eurogroup Working Group (EWG) – a group of Eurozone finance officials – yesterday said there had been no overpayment, and that the case was not closed.

“The EWG had a first discussion on the amount of bonds returned from the HFSF to the EFSF in late February,” an EFSF spokesman said.

“There was agreement that, legally, there was no overpayment from the HFSF to the EFSF. The EWG will consider how to move forward on this issue in due course.”

The €1.2bn of cash may be made available to Greece. However, the procedure would require a parliamentary vote in some Eurozone countries which could take weeks.

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