Brussels, 08/04/2013 (Agence Europe) - On Monday 8 April 2013, the European Commission made reassuring noises to the effect that savings in Greek banks will not be raided, following an announcement by the Central Bank of Greece on Sunday evening that four banks - BNG (National Bank of Greece), Alpha Bank, Eurobank and Piraeus Bank - will be bailed out separately, thus abandoning the de facto merger that was due to take place between BNG and Eurobank (see EUROPE 10821).
Faced with problems with merging the two banks, Greeks feared that a Cypriot solution might be on the cards, with shareholders and savers and businesses with more than €100,000 would be raided and suffer heavy losses from the bank bailouts (aimed at increasing the four banks' own capital). The European Commission tried to calm the situation by saying that clients with BNG and Eurobank had nothing to fear.
Governor of the Cypriot Central Bank, George Provopoulos, said on Greek TV station NET last week that the creation of a BNG/Eurobank merger, whose capital requirements would be in the region of €1.5 billion, would make recapitalisation difficult without coming under public control. The banks have to have 10% of capital to ensure autonomous governance, which the two banks are finding it difficult to drum up. A source at the Greek finance ministry told Bloomberg that the Hellenic Financial Stability Fund (HFSF) was prepared to recapitalise them if private funding could not be found to meet the 10% capital requirement, but Provopoulos rules out any idea of the merger operating as a traditional public bank. (EL/transl.fl)