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While the interest rates on Greek bonds are falling below 8%, a real war between Athens and its lenders is taking place behind the curtains, its pledge being Greece’s return on the international markets and the use of the capital of the Financial Stability Fund that will remain after the bank recapitalisation.

This pending issue is the reason for the delayed announcement of the results of the stress tests which had been scheduled for the end of December but had been postponed by a month in order for the government to be able to reach an agreement with the supervisory Troika.

The government expects that in 2014-2015 it will fill at least part of the financial hole in the treasury with the capital that will remain after the bank recapitalisation. Therefore, it seeks to carry out the stress tests in a way that will limit, as much as possible, the additional capital requirements of the credit institutions. One of the main requirements of the government is for the core tier I indicator to be fixed at 8%, which is the rate applicable to the other banks in the euro zone, rather than at 9%, which is the rate in force for the Greek banks, since this alone will reduce the capital requirements of the Greek banks by about 2.5 billion euro. In addition, the government insists on including in the capital of the banks the full amount of the deferred tax revenue, as was the case with the banks in Spain and Italy, instead of including only 20% of it, which is the case with the Greek banks.

This will reduce the capital requirements of the Greek financial and credit institutions by another 3 billion euro. The government plans to fill the financial hole of 14-15 billion euro during the period 2014-2015 as follows:

1. With 3 billion euro by reducing the interest rates on loans to the public sector.

2. With 4 billion euro by "recycling" the bonds which were issued in 2008 in connection with the bank recapitalisation and which will mature in 2014. Instead of being paid, these bonds may be replaced with new ones.

3. By using the capital from the Financial Stability Fund.

4. By launching a limited amount of short-term bonds on the international markets.

Thus, the Greek government hopes to avoid a third package of economic assistance, which would go along with a new binding memorandum.

However, according to sources close to the negotiations, the lenders led by the European Central Bank disagree with the use of the capital of the Financial Stability Fund for any purposes other than the bank recapitalisation. The lenders’ representatives are negative as regards the reduced core tier I indicator and the issue of the deferred tax revenue, and the European Central Bank rejects the "recycling" of the bonds issued in 2008.

Finally, the Troika has not yet approved the bill for the new capital increase of the banks sent to the lenders by the Ministry of Finance. It contains regulations to facilitate the participation of individuals in the increase in the share capital of Eurobank and the sale of bank shares from the Financial Stability Fund. Furthermore, it is believed that regulations will be passed that will provide for the faster and gradual withdrawal of the Financial Stability Fund from the share capital of the other three banks, namely the National Bank of Greece, Piraeus Bank and Alpha Bank.

Under the existing legislation, the Fund may not sell the shares held before the expiry of a period of three years during which it has to make them available only to holders of warrants issued within the last recapitalisation and on condition that the latter will not take advantage of the right to sell them.

This fact is hindering the public sector from withdrawing from the banks.

One solution that has already been discussed provides for the making of public offers for the acquisition of the warrants in circulation prior to the expiration of the three-year term on the part of the Financial Stability Fund which will then sell the shares represented by them to strategic investors.

Government officials believe that the position of the Troika is not only dictated by the need for a buffer if the banks need additional capital at a certain point. According to them, some euro zone countries, including Germany, prefer Greece to remain under strict supervision through a new package of financial aid and a new memorandum. In support of this claim, they recall the statements of German Finance Minister Wolfgang Schaeuble and of senior functionaries of the German Social Democrats on the granting of a new package of economic aid to Greece.