De­lays threaten debt re­pay­ment funds

Com­pe­tent au­thor­i­ties have not sent the nec­es­sary dis­burse­ment ap­pli­ca­tions to the Fi­nance Min­istry

Kathimerini English - - Focus - BY SOTIRIS NIKAS

While state debts to third par­ties con­stantly on the rise, and cur­rently ex­ceed­ing 7 bil­lion euros, the en­ti­ties that are re­spon­si­ble for deal­ing with the re­pay­ments have yet to send the Fi­nance Min­istry their re­quests for amounts due, even though there is 1.8 bil­lion euros in the state cof­fers marked specif­i­cally for this pur­pose.

Greece re­ceived that 1.8 bil­lion euros from its cred­i­tors with the di­rect or­der for it to go into the mar­ket via the re­pay­ment of ex­pired debts. How­ever, state en­ti­ties are de­lay­ing the process, risk­ing the loss of the funds al­to­gether.

Ac­cord­ing to Fi­nance Min­istry fig­ures, at the end of May, to­tal ex­pired debts to sup­pli­ers and tax­pay­ers amounted to 7.02 bil­lion euros. This was 300 mil­lion euros higher than the fig­ure at end-April, most of which (190 mil­lion euros) con­cerned new debts run up by the so­cial se­cu­rity funds.

Ac­cord­ing to the timetable of the bailout agree­ment, the state should have re­turned some 500 mil­lion euros to sup­pli­ers and tax­pay­ers in June. An­other 800 mil­lion euros is due to fol­low this month, plus 500 mil­lion in Au­gust, for a to­tal of 1.8 bil­lion this sum­mer alone.

How­ever, the de­lays recorded by var­i­ous state en­ti­ties mean that the state is run­ning the risk of los­ing those funds. Fur­ther­more, if they are not used for that ex­press pur­pose, the coun­try’s cred­i­tors may change their minds about pro­vid­ing ad­di­tional fund­ing for pay­ing off more state debts to the do­mes­tic mar­ket af­ter the sum­mer.

The agree­ment be­tween Athens and the lenders states that if the loans is­sued for cov­er­ing the state’s debts and de­posited in a spe­cial ac­count re­main un­used for more than three months, then the Euro­pean Sta­bil­ity Mech­a­nism (which makes those dis­burse­ments) re­serves the right to ask for the money back or re­di­rect it to other fund­ing needs of the pro­gram, 531.64 1.1080 such as the na­tional debt re­pay­ment.

The agree­ment fur­ther states that un­less at least 80 per­cent of the debts re­lated to the loans have been re­paid in time, no new dis­burse­ment for this pur­pose will take place. There­fore, if debts of 1.44 bil­lion euros are not re­paid in time from the 1.8 bil­lion re­ceived for that rea­son, then the fol­low­ing tranche for debt re­pay­ment would be lost. That tranche amounts to 1.7 bil­lion euros and can be sent to Athens up to end-Oc­to­ber – oth­er­wise Greece will miss out on it.

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