The Eurozone officials have informed the Greece Syriza government that the claim for recapturing €1.2bn of the Greek bank recapitalization fund is invalid, as the country has no legal claim on this cash.
In attempt to relieve pressure, as Greece is running out of cash in a record time, the country has urged to reclaim €1.2bn. As in their believe, there has been an error made last month, vowing that the specified fund should have returned to the Greek banks. Instead, the EU finance ministers made the decision to return all of the remaining bank rescue facility of €10.9 bln, back to Eurozone’s bailout funds.
A conference call today, between all Eurozone finance ministeries representatives, provided a clear and concise answer to the Greece’s government, with a definite no-go. In more detail, it was clarified that the €1.2bn was rightly returned, whilst the cash in the bailout fund will remain intact.
EU rejects Syriza’s claim, which adds extra concern to the country, as it is facing by the 9th of April the due date for repaying one of the earlier bailout loans provided by the International Monetary Fund. The expected repayment is set at the total of €450 million. In conjunction with this inherent payment, Greece is also encountered with a staggering €1.7billion bill, which has been allocated for the pensions and wages. Having both debts on the platter, Greece is unable to cover them both simultaneously, hence it is expected that the country will run out of cash sooner or later.
EU Rejection conveys destruction or benefits?
Interestingly, analysts opine that this particular rejection will force Greece to accelerate the process on the country’s reforms, and urges them to present a passable list to the EU in the upcoming days.
After the rejection of the EU, the Greek borrowing costs have been rising. Evidently, investors are worrying about the worsening relationship between Greece and EU. Surprisingly, this situation benefited the Greek bond yield, as the three-year bond gained 23 basis points, whilst the ten-year bond gained 13 basis points.