Greek government presses social security funds to hand over cash

[WestVirginiaRebel]

Financial Times:

Greece’s cash-strapped Syriza government is pressing the country’s social security funds to hand over hundreds of millions of euros immediately to ensure that pensions and civil servants’ salaries are paid this month.

 

The unprecedented transfer of bank deposits, which is opposed by pension and welfare funds, follows an unexpectedly sharp fall in tax revenues in January that has left the finance ministry scrambling to raise funds to make a €1.2bn loan repayment to the International Monetary Fund due by March 20.

 

Yanis Varoufakis, the finance minister, insists Greece has enough cash to meet its debt obligations this month, while at the same time warning that payments to government suppliers and refunds of value added tax may be suspended because of the cash crunch.

 

But, according to another senior official, the government needs to rake in an extra €1.5bn by the end of March to avoid delaying some wage and pension payments.

 

“People find it very hard to believe that a country in the heart of Europe could be facing a problem of this kind . . . after all Greece is not Venezuela,” said Miranda Xafa, director of EF Consulting in Athens and a former Greek representative to the IMF.

 

The social security funds and other state entities hold as much as €2bn of cash reserves that could rescue the public finances both this month and next if they were transferred to the central bank’s Common Fund, which already manages more than €8bn of state agencies’ cash.

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Screw the old folks, the state needs money!