Greek parliament adopts law on cash reserves
Greece’s parliament has approved a legislation obliging public sector bodies to hand over their cash reserves to the country’s cash-strapped central bank as Athens edges closer to a debt default.
The 300-seat legislature adopted the decree by 156 votes in favor and 104 against on Friday in a bid to cover "the state's urgent needs, which amount to three billion euros over the next 15 days".
The measure requires some 1,400 public institutions, including universities and hospitals, to lend their reserves to the state to pay for civil servants' wages and debt servicing costs.
"It is the state's commitment to pay salaries and pensions," said the government's parliamentary speaker, Nikos Filis, adding, "The money will be earning better interest rates [than what banks pay]."
The development comes as an end-of-April deadline draws near for the leftist Greek government to reach a deal with its international creditors to unblock bailout funds and avoid defaulting on its sovereign debt.
At a meeting in the Latvian capital city of Riga on Friday, eurozone finance ministers urged Athens to come up with a revised list of reforms to seal the deal on its financial aid.
Eurogroup Chairman Jeroen Dijsselbloem said following the meeting that talks with Greece need “significantly more progress,” adding, "A comprehensive deal is necessary before any disbursement can take place ... We are all aware that time is running out."
Greece received two bailouts in 2010 and 2012 worth a total of €240 billion (USD 272 billion) from the so-called troika of international lenders following the 2009 economic crisis. However, it has been unable to borrow on international markets over the past few years due to high borrowing rates.
The government of Prime Minister Alexis Tsipras, whose leftist Syriza Party stormed to victory in January 25 elections, has tried to renegotiate the terms of the country’s bailout it received in return for imposing harsh austerity measures.
During his electoral campaign, Tsipras vowed to reconsider the austerity measures, which have caused mounting dissatisfaction in the country.
SSM/NN/HRB
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