Sunday, March 29, 2015

The Greek government will not receive €1.2bn (£883m) in European rescue funds after the bloc's officials ruled the Leftist government had no legal claims on the cash.  Athens requested a return of the funds it said were erroneously handed to creditors from Greece's own bank recapitalisation fund, the Hellenic Financial Stability Facility (HFSF).  The transfer was originally arranged by the previous Greek administration.   But eurozone offcials have blocked the claim, saying it is "legally impossible" transfer the money back to Athens.   "There was agreement that, legally, there was no over payment from the HFSF to the EFSF," said an fund spokesman.   Germany's finance ministry was also reluctant to allow the release, claiming there was "no reason" to make the transfer. The decision is a further blow to the Greek government's attempts to stay afloat over the next few weeks. Athens has been scrambling to make repayments to its creditors and continue to pay wages and pensions. The government now faces another €450m cash squeeze at the beginning of April. As part of its efforts to stay solvent, the Leftist government has also requested a €1.9bn transfer of profits held by the European Central Bank, from the holdings of its Greek debt.  So far, the ECB has rebuffed all Greek pleas to alleviate their cash squeeze. The central bank moved to officially bank the country's banks from increasing their holdings of short-term government debt.

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