ATHENS, April 23 (Reuters) - Greece is considering asking the European Stability Mechanism (ESM) to buy Greek government bonds held by the European Central Bank (ECB) to pay for debt redemptions this summer, newspaper Kathimerini reported on Thursday.
Shut out of bond markets and fast running out of cash, Greece faces big redemptions to the ECB, 4.18 billion euros ($4.46 billion) in July and 3.38 billion in August, as remaining bailout money remains locked until it agrees with creditors on reforms.
“The aim of the government’s plan is to have the ESM buy the bonds and reach a deal to repay them further out in time, as is the case with loans from the EFSF (European Financial Stability Facility),” the paper said without citing sources.
To receive some 7.2 billion euros of remaining bailout cash, Athens must agree a reforms’ programme with the European Union, the International Monetary Fund and the ECB. Progress with negotiations has been painfully slow.
Under the plan cited by Kathimerini, Athens would agree a new loan deal with the ESM, the euro zone’s rescue mechanism, to redeem some 27.2 billion euros of Greek government bonds the ESM would buy from the ECB.
The ECB has said that EU treaties do not allow it to cancel or extend bonds bought under its so-called Securities Markets Programme (SMP).
“It is not at all certain that this plan will be adopted by the euro zone and the ESM, but it is being promoted by the Greek side to overcome the hump in July and August,” the paper said.
Greece’s finance ministry was not immediately available for comment. ($1 = 0.9362 euros) (Reporting by George Georgiopoulos; Editing by Louise Ireland)