Brussels, 26/03/2014 (Agence Europe) - The European Commission has provided some notes for the Greek government on how to recapitalise Greek bank Eurobank, the majority of whose shares are currently owned by the Greek Financial Stability Fund. The competition department of the European Commission is keeping an eye on matters to ensure that the injection of public money does not violate EU state aid rules.
Competition Commissioner Joaquin Almunia has sent a letter to Greek Finance Minister Yannis Stournaras about the recapitalisation of Eurobank, says a finance ministry source, noting that “the content was not that surprising”, as the letter contained recommendations about, for example, allowing use of private money first and foremost. The source added that the letter “contained a paragraph that could allow the Greek state to benefit further from a possible upswing in Eurobank share price”.
Greek newspaper Ekathimerini reported on an exchange of letters on Monday, and says that Almunia says that this question will decide whether or not the bank's recapitalisation will come from private funds or wholly from the Greek Financial Stability Fund. Ekathimerini notes that if the fund is required to chip in, then subordinate debt may end up being downgraded.
On another note, the government is due to unveil details on Friday of how it is planning to redistribute some of the country's primary budget surplus for 2013. Greek newspapers report that a significant proportion of the €525 million will go to people on low pay or low pensions. (EL)