Eurogroup Asks EFSF to Assist Greece’s 1.2-Billion-Euro Claim

efsfEurogroup President Jeroen Dijsselbloem has requested from the Euro Working Group and the European Financial Stability Facility (EFSF) to examine Greece’s request for a 1.2-billion-euro refund, linked to previous funds it received in order to capitalize its banking system.

Athens borrowed 49.7 billion euros in cash and bonds from the EFSF, from which it used 40 billion to secure its fragile creditors, while the remaining 10.9 billion were returned to the EFSF. Dijsselbloem “has asked the EFSF to provide an analysis of the matter,” an unnamed Fund spokesperson told financial news organization Market News International (MNI) earlier today. At the same time, the Greek request has also been confirmed by a Eurogroup source, explaining to MNI, though, that in case the assessment affirms the request, the amount will return to the Hellenic Financial Stability Fund (HFSF) and will remain for future possible bank needs. “The request has to be viewed by the Single Supervisory Mechanism and the final decision will be taken by the EFSF Board of Directors. That is the procedure,” the source said.

Moreover, both officials said they are not against such a development if it is proven that the amounts derived from state funds, however they cautioned that the Greek government will not be able to use it to finance state needs. “The legal framework is clear as to how the bank recap funds should be used. They should not be confused with possible loan tranche disbursements,” the Eurogroup source concluded according to MNI. On the opposite, Greek officials have claimed that the amount will stay in the HFSF and can be used “creatively” to fund the state via intra-governmental repos.