Greece Moves to Seize Public-Sector Funds

The Greek government issued a decree that forces local governments to transfer cash balances to the central bank, as debt to the International Monetary Fund and month-end salary payments come due.

“Central government entities are obliged to deposit their cash reserves and transfer their term deposit funds to their accounts at the Bank of Greece,” the decree issued Monday on a government website said. The “regulation is submitted due to extremely urgent and unforeseen needs.”

The move to effectively confiscate cash reserves currently held in commercial banks and transfer them to the central bank could raise about 2 billion euros ($2.15 billion), two people familiar with the issue said. The cash can then be used to meet obligations such as the repayment of a 770 million-euro-tranche owed to the IMF on May 12, the people said.

Greece and its creditors remained at loggerheads with time running out to unlock aid and avert a default on the country’s 313 billion euros of obligations. The sides haven’t even set 2015 budget targets, let alone policies to meet them, an official representing creditors said Monday, asking not to be named as talks aren’t public.

Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell