Greece fails to convince Europe on €1.2bn payment

GMT 17:04 2015 Wednesday ,25 March

Arab Today, arab today Greece fails to convince Europe on €1.2bn payment

Greek PM Alexis Tsipras
Athens - AFP

Greece does not have the right to 1.2 billion euros ($1.3 billion) it believed it mistakenly returned to the eurozone's bailout fund, an spokesman for the fund said Wednesday after talks with Greek officials.
A working group from the Eurogroup of eurozone finance ministers met with Greek officials to discuss the amount returned by Greece's financial stability fund (HFSF) to the European Financial Stability Facility (EFSF) in late February.
"There was agreement that, legally, there was no overpayment from the HFSF to the EFSF," said the EFSF spokesman, adding that the working group would consider how to move forward on the issue.
Greece's radical leftist government last month was obliged to return 10.9 billion euros in EFSF bonds that remained unused in a rescue fund created for the recapitalisation of Greek banks.
But the country's new leaders later realised that the previous conservative-socialist government had used 1.2 billion euros from the HFSF's own funds to support the banks, so believed it was entitled to that much in aid.
Though relatively small, the sum is vital to the government.
Greece is facing a cash squeeze since the EU-IMF held back on disbursing loan funds to Athens after the anti-austerity Syriza party came to power in January promising to roll back painful reforms.
The government's coffers are believed to be close to empty, with 15.5 billion euros in debts coming due through August.
A source in Athens said the texts of agreements were clear that unused funds should be returned, but as the EFSF spokesman implied, the issue is not closed as politicians could amend the terms.

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