Disbursement of bond profits hits a snag

By Sotiris Nikas

The disbursement to Greece of 2.1 billion euros from the profits of the Eurosystem from Greek SMP and ANFA bonds has hit a stumbling block due to timetable changes and different interpretations of existing agreements.

The original planning had provided for the 2.1-billion-euro payment to Athens this month, under two conditions: that the second quarterly progress assessment of the Greek program by the country’s creditors would have been completed within the month of July, and that the government would have been successful in meeting the creditors’ requirements.

However the delay of the previous inspection by several months and the fact that the next formal mission of the troika – the representatives of the European Commission, the European Central Bank and the International Monetary Fund – is now scheduled for September have raised obstacles to the return of the profits from the Agreement on Net Financial Assets (ANFA) and the Securities Market Program (SMP).

This opens a gap in the country’s fiscal planning, as Athens had included these revenues in the July receipts, which are needed to cover part of next month’s major dues. That plan was fully compatible with the original planning of the troika visits, but as the situation now stands, the eurozone is refusing to hand out the 2.1 billion euros before the September assessment is completed.

Justified or not, this stance represents a big snag in Greece’s effort to cover its funding requirements. In August Greece will need to service obligations adding up to 6.7 billion euros, the bulk of which (3.9 billion) concerns bonds that are set to mature and are held by the European Central Bank.

Sources say that the issue was discussed during last Monday’s Euro...