The Euro Working Group discussion on the Greek issue ended shortly after 2pm on Wednesday, March 25. The Eurozone officials decided that Greece had no claim to the 1.2 billion euros that the country requested from the European Financial Stability Facility (EFSF), which were linked to a scheme for recapitalizing banks.
However, EFSF officials noted that this was the first discussion on the issue of Greek bonds that were returned to EFSF in late February, and there would be further consideration on how to deal with the issue in the future.
“There was an agreement that, legally, there was no overpayment from the HFSF to the EFSF. The EWG will consider how to move forward on this issue in due course,” an EFSF spokesman said.
The former Greek government led by Antonis Samaras decided on proceeding with the recapitalization in cash, rather than in EFSF bonds, because it was easier than the formal procedure of unlocking EFSF funds for recapitalization.
However, the new SYRIZA-led government, which has been cut off from markets, is desperate for revenues as it has to make its debt repayments. Therefore, the government wishes to reverse that decision in order to use some of the remaining EFSF bonds to recapitalize banks and take back its cash.