Business

Greece asks public agencies to hand over reserve cash

  • 20 April 2015
  • From the section Business
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Greece has ordered its public sector bodies to hand over any reserve cash to help it meet a payment due to the International Monetary Fund (IMF).

The country is running out of cash and must repay the IMF nearly €1bn in May.

It comes after the head of the European Central Bank, Mario Draghi, said that Greece needed to do much more if it wanted access to bailout funds.

Negotiators are trying to strike a deal ahead of a meeting of eurozone finance ministers on Friday.

There are mounting fears that Greece could default on its debts and exit the eurozone.

Prime minister Alexis Tsipras urgently needs money to pay government salaries as well as the country's debt repayments.

In order to get the funding, he needs to strike a deal with eurozone lenders at the European Central Bank, the European Union and the IMF, and introduce economic reforms.

"More work, much more work is needed now and it's urgent", said Mr Draghi at the weekend.

"We all want Greece to succeed. The answer is in the hands of the Greek government."

Asked whether Greece could default, Mr Draghi said "I don't want to even contemplate such an event... the Greek leaders repeatedly state that they want to honour all their obligations".

Greek public agencies have already been asked for voluntary payments, but this now looks set to be made compulsory.

The decree by the Greek government, which must still be passed by parliament, says "with this act, the government hopes to cover urgent needs of the state amounting to three billion euros for the next 15 days".

It includes all public bodies and local authorities, but, according to Reuters, excludes pension funds and some state-owned firms.

An Athens-based analyst told Reuters: "This is a pre-emptive move to ensure that they will be able to secure as much liquidity as possible because of the squeeze.

"There are still some billions of euros in cash reserves parked in banks by state entities."

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