Euro zone bailout fund to analyse 1.2 billion euro refund to Greece

The euro zone’s bailout fund will discuss on Wednesday the possibility of returning to Greece 1.2 billion euros (881.9 million pounds) in bank recapitalisation funds, euro zone officials said.

If the board of directors of the European Financial Stability Facility (EFSF) approves the transfer, it would be a welcome financial shot in the arm for the Greek government, which is quickly running out of cash.

A source familiar with the state of Greek finances said on Tuesday Athens will be out of money by April 20.

“Eurogroup President Jeroen Dijsselbloem has asked the EFSF to provide an analysis of the matter. Also, he has asked the chairman of the Eurogroup Working Group to take the issue up at short notice,” an EFSF spokesman said.

Greece believes it should get the 1.2 billion euros back because it says it paid this amount from a cash reserve of its own bank stabilisation fund, the Hellenic Financial Stability Facility (HFSF), to recapitalise Greek banks.

The recapitalisation was done in cash under the previous government of Antonis Samaras even though the HFSF still had 10.9 billion euros in EFSF bonds it could use for the purpose.

The new government of Alexis Tsipras, cut off from markets and desperate for revenue as debt repayments loom, would like to reverse that decision, use some of the remaining available EFSF bonds to recapitalise banks and take back its cash, which it could then use for other pressing needs.


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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam