The mayors and district governments have refused to hand over their cash reserves to the government, after a heated meeting that was called by the central unions of municipalities and districts (KEDE and ENPE respectively).

During the discussion the Alternate Minister of Finances Dimitris Mardas attempted to justify the government’s legislative initiative, however his explanations were deemed “insufficient” by KEDE president Giorgos Patoulis, who warned of mobilizing against the government decision. On Thursday the controversial act will be submitted in Parliament for ratification, with the mayors and district government expected to issue decisions and go on strike.

Mr. Mardas told the mayors that they must transfer all available funds, aside from what they need to cover expenses over the next 20 days. In case that the government holds onto the reserves for more than two months, they would receive a 2.5% interest rate when commercial banks give a 1% rate.

The mayors reacted to this suggestion, noting that they currently receive interest rates higher than 2.5%. The Alt. Minister explained that the government took the initiative in order to cover needs over the next couple months, while conceding that the execution of the budget was not progressing as expected, nor did revenue streams meet expectations.

A resolution was passed at the emergency meeting, where it is argued that the government initiative is unconstitutional as it conflicts with the provision of autonomy for municipalities. The resolution calls all municipalities to refuse to comply, until the scheduled KEDE conference on the 7th of May. The resolution also urges mayors to begin protesting against the measure, pressure the government and launch a campaign to inform local communities.

The district governors appeared willing to help the government, but rejected unilateral actions such as the legislative act and have requested a meeting with the Prime Minister. Until then, they will not transfer their available funds to the Bank of Greece, as requested.