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.