This article originally appeared at Zero Hedge
Just yesterday we warned that, among the ‘solutions’ the Greek government was exploring in its scramble for cash to pay back The IMF loan, was ‘borrowing’ from the nation’s pension funds. Today we get the sad confirmation that indeed Greece will raid cash reserves in pension funds and other public sector entities to cover its funding needs. As Reuters reports, Greece will use short-term repo transactions to transfer the cash, but one government official said they could not be used to repay the IMF. As the radical left-wing government takes from the implictly wealthier Greeks (pension funders), it is giving free electricity, a rent allowance, and food stamps to the poor.
As we warned yesterday, we are sure the Greek people will be enthused when they find out what the ‘radical left’ has in store for their funds… And as reuters reports, the raiding of Greek pension funds is now confirmed…
Greece is tapping into the cash reserves of pension funds and public sector entities through repo transactions as it scrambles to cover its funding needs this month, debt officials told Reuters on Tuesday.
Shut out of debt markets and with aid from lenders frozen, Athens is in danger of running out of cash in the coming weeks as it faces a 1.5 billion euro loan repayment to the International Monetary Fund this month.
The government has sought to calm fears and says it will be able to make the IMF payment and others, but not said how.
At least part of the state’s cash needs for the month will be met by repo transactions in which pension funds and other state entities sitting on cash lend the money to the country’s debt agency through a short-term repurchase agreement for up to 15 days, debt agency officials told Reuters.
However, one government official said they could not be used to repay the IMF unless Athens was able to repay the state entities the cash it borrowed from them.
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Tomorrow brings a regularly scheduled six-month T-bill auction of 875 million euros to refinance a maturing issue, in a sale that will be closely watched.
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But Syriza appears to be “Robin Hood”-ing, as Keep Talking Greece reports, the coalition government submitted a draft legislation to tackle the humanitarian crisis in Greece. The measures will benefit impoverished households unable to access to three basic goods: electricity, housing and food.
The draft contains measures among others for free electricity, rent- and food allowances. But also free access to health and public transportation means.
In particularly:
a) Free electricity for up to 300 KhW per household until the end of 2015. The measure refers to some 300,000 households and especially those already in the ‘social price policies program’ of PPC.
Fee-free reconnection of power to primary residence due to outstanding debts to the Public Power Company.
b) Rent-allowance of €70 – €220 per month for up to 30,000 households. The allowance will not be considered as ‘taxable income’ and will not be seized by the state for outstanding debts. However the allowance could be used to cover debt repayments to tax authorities and social insurance funds.
c) Food allowance for the supply of basic food and other items for 300,000 people. The allowance will be distributed through food stamps or some electronic means (‘smart card’ to be charged on weekly basis.)
The allowance-amount will vary depending on the number of the family members. The food and other basic good supplies will be provided by businesses and companies willing to participate in the program.
The government seeks to establish the food program in cooperation with the Greek Orthodox Church and the local municipalities.
Priority will be given to families with under-aged children, jobless and long-term unemployed, tenants under risk to be evicted and families who do not have access to these three basic goods: electricity, housing, food.
The criteria for the beneficiaries to participate in the program will be based on tax declarations and sources of income.
Main criteria is the “poverty line” which is considered “annual income of up to €5.023 per single household and up to €10,547 for a four-member family.”
According 2013-data of Greek Statistics Authority ELSTAT, 35.7% of Greeks live at risk of poverty and social isolation.
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Greece remains second only to Ukraine for default risk….
