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The Bank of Greece has undertaken to consider the issue of capital adequacy and is to announce the results of the stress tests of the banks by Friday. This will happen despite the serious discrepancies in the views that were found during yesterday's meeting of governor George Provopoulos with the representatives of the Troika.

As a supervisor, the Bank of Greece is responsible for determining the capital requirements of the sector and it will announce, in full transparency, the report on recapitalization and the statement of BlackRock, providing the relevant grounds for that, as stated by sources from the bank.

The Troika has estimated the capital requirements of the banks at about 8.5 billion euro or 9 billion euro, without actually objecting the methodology or other parameters of the assessment.

The report by the Bank of Greece has however estimated that the capital requirements of the banks are in the range of 5.8 billion euro and 6.2 billion euro. At the same time, the full 70-pages report will be uploaded on the website of the central bank, for the purpose of transparency, and in order for it to inform the markets that will assess the data.

Methodology

The Bank of Greece stands firmly behind the assessment that is made ​​on the basis of the methodology and the assumptions verified by three specialized companies, namely BlackRock first and Rothschild and Ernst&Young subsequently.

Despite the constant meetings held between the technical teams of the Troika and officials from the central bank in previous days, the positions remain different. At yesterday's meeting with head of the bank George Provopoulos, the representative of the International Monetary Fund Paul Thomsen insisted on setting the estimates at 8.5 billion euro or 9 billion euro without presenting specific arguments. European Commission representative Matthias Morse and European Central Bank representative Klaus Masuch played the role of Pontius Pilate, as the first one said he was not familiar with banking matters whereas the latter supported the position of the Bank of Greece as a supervising authority.

The role of the International Monetary Fund

It is worth noting that the International Monetary Fund in particular, which is formulating objections, has not submitted any formal figures during the months-long assessment, excluding the leak of figures in the Financial Times newspaper, as stated by sources involved in the negotiations with the technical teams.

The question is if the opposition on the part of the Fund is due to the fact that the banking matters have been bound with the overall negotiations, as had happened in late November, when the Troika had refused to give the green light for the announcements, without presenting specific arguments. It is expected that the Bank of Greece will inform the four systemic banks on the final performance on Thursday and will publish the whole report on Friday the latest.

Capital requirements

The initial data announced by the Bank of Greece showed that the capital requirements of Eurobank were estimated at 2.7 billion euro and that of the National Bank of Greece at 2 billion euro to 2.3 billion euro. The capital requirements of Piraeus Bank were estimated at the maximum permitted levels whereas those of Alpha Bank at zero.

The banks and the central bank have exchanged opinions in connection with the assessment of the restructuring plans and they are going to announce the final data tomorrow.

The banking sector, which resents the actions of the Troika, considers as a step forward the announcement of the results of the stress tests, as this will open the way for initiatives in terms of restructuring and planning in the field of credit expansion. In the case of Eurobank this will open the way for capital increase provided that the relevant law is voted.

The issue of mass layoffs remains open

The issue of the liberalization of mass layoffs remains open after yesterday's meeting of Minister of Labour Yiannis Vroutsis with representatives of the Troika at the Ministry of Finance.

After the meeting, part of which was held in the presence of Minister of Finance Yiannis Stournaras, senior officials from the Ministry of Labour reassured, "The talks are aimed at finding a common path with the representatives of the lenders. There will be another meeting in the coming days in order to find a mutually acceptable solution."

A government representative, who took part in yesterday's meeting, states the same, "Our theme was the liberalization of mass layoffs", adding that during the nearly three-hour long meeting the Ministry of Labour explained the future regime relating to the liberalization of layoffs in companies that are in the process of restructuring.

The same source points out that during the first meeting that took place earlier this week, the representatives of the lenders were left with the impression that instead of the full liberalization required by them, along with the enforcement of a relevant law, the Greek side had proposed today’s position of the Minister of Labour with some minor modifications. According to government representatives, the purpose of the next meeting will be for the Troika to comment on the Greek proposal and for the parties to exchange views in order to reach a common position regarding the change in the existing regime.