The European Stability Mechanism (ESM) approved on Tuesday the transfer of 555 million euros from the Hellenic Financial Stability Fund (HFSF) to the Greek State, sources said. The funds come from the dividend payments of preferential shares that banks received for the 2008 recapitalization.
While the ESM has agreed to do so last week, it blocked the transfer on Saturday, claiming that the HFSF funds could not be used for any purpose other that what they were intended for. After long negotiations over the weekend and after the positive outcome of Monday’s Eurogroup, the ESM gave in.
A European Financial Stability Facility (EFSF) spokesman noted that the EFSF had no involvement with the 555 million euros remaining in the HFSF that the Greek government was asking for, since they concerned state support for banks before 2010 when Greece received the first EFSF loans.
The spokesman said that funds transferred to Greece from the EFSF, in the context of the bailout agreement to recapitalize Greek banks, were placed in the HFSF but of the 48.2 billion euros sent, the Greek banks used 37.3 billion. The remainders were returned to the EFSF and the sum remaining in the HFSF were 856 million euros in cash, derived from revenues generated by bank recapitalization and reforms.