Greek FinMin Yanis Varoufakis raised eyebrows and generated his share of shivers on Wednesday when he said he’s counting on the ECB to help Greece avoid default next month when it runs out of money, while at the same time playing up the positive by saying deposits are also starting to flow back to domestic banks.
In his interview to Bloomberg television in Athens, he said the ECB owes Greece almost two billion euros from a return of profits under a program to buy euro-area bonds to support the market. He added that the Greek government must make four payments to the IMF in March to service its past bailout loans.
According to Bloomberg, Varoufakis stressed that Frankfurt-based ECB “could hand over this money to the IMF as partial repayment … I’m giving you examples, nothing has been decided. This is money we are owed. This is our money, an overpayment to the ECB.”
As Bloomberg reports, ECB President Mario Draghi told the European Parliament on Wednesday that it’s a popular misconception that it’s up to his institution to return any profit from the Securities Markets Program. He said governments are in control of the funds.
Specifically, the question raised was: “Do you still believe that the SMP profits are owned by the ECB and are kept there?”
He said “that’s not so … The SMP profit, like any other profit, has been distributed to all the central-bank members of the ECB. And the central-bank members of the ECB have transferred their profits to their national budgets.”
In his interview, Varoufakis referred to a profit agreement and stressed that the deal made on Feb. 24 to extend the availability of bailout funds calmed fears about Greece’s place in the euro area. On the same day, he said about 700 million euro returned to Greek bank accounts, with the reporter, however, pointing out that tens of billions have already left.
“It’s a question of direction, as you know…” was Yanis’ response.
Nevertheless, he appeared confident that Athens will not have a cash-flow problem. “I find it very hard to imagine that Europe and the IMF will allow us to trip over what is a relatively small cash flow problem.”
Regarding criticism by IMF chief Christine Lagarde that the list he emailed eurozone creditors was not “very specific”, he said “nobody ever expects, in their right mind, that one can come complete with financial analysis, fiscal analysis, quantitative targets and monitoring and measuring and performance indicators.”
