Galery

2

1

The first victim of the crisis in the Greek banking system may turn out to be the Greek banks in Bulgaria. So at least the representatives of the International Monetary Fund, of the European Central Bank and of the European Commission see a possible way out of the deadlock, which the financial institutions of our southern neighbor are in. During the past week they met with top managers and major shareholders of large Greek banks and all of them agreed that the main problem of the Greek economy at present and in particular in its banking system is the lack of fresh capital and cash. Global markets are practically closed for both the Greek state and for its banking institutions which practically maintain their liquidity only through the loans from the European Central Bank.
    According to the experts of the triple union the bank mergers would not bring fresh capital in the market, because "when two poor people decide to get married, they don’t automatically become rich." That’s why on one hand they have encouraged bankers to look for strategic investors from abroad who are able to provide fresh capital to the Greek market. On the other hand, however, they have warned them that the international investors do not believe in Greece and do not want to take the risk of its economic recovery. There are many reasons – from high taxes to extremely unfavorable labor legislation.
    Having in mind this bleak picture the outcome, which the experts of the triple are offering is the sale of the subsidiaries of Greek banks in Sout Eastern Europe. The scheme, which they are offering is: a Greek bank, which is strong in Romania to absorb another Greek bank. And the subsidiary of the second, which is strong in Bulgaria to absorb the first. According to the IMF this would reduce the operating costs of the institutions and respectively it would increase their profits - for example, instead of maintaining two trading floors only one will be maintained and instead of maintaining two administrations there will be only one. At the same time, the banks in Greece will continue to compete and thus the interpersonal problem will be avoided which is currently obstructing a lot of mergers - ie which of the two executive directors to continue to be in charge.
    "Find money or sell" – this according to the newspaper "Vima" was the suggestion, which the experts of the triple literally made to the Greek bankers. They also urged them to join the Fund for fiscal stability from which they will also be able to receive cash money. According to the scheme of the board the Greek state will own preferred shares in any bank which comes to need its services. The preferred shares are not entitled to voting rights. If within five years the financial institution does not repay the Fund, those shares will become ordinary ones and will be entitled to voting rights. Furthermore, the Greek state will have the right to appoint a representative on the Board of directors of the Bank, who will have veto power in the decision making.
    IMF insists that one way or another the Greek banks increase their capital and reduce their dependence on the European Central Bank, which can not finance them indefinitely. They expect deterioration in the economic climate in Greece in 2011 and even more difficult times for its banks. According to the experts from the Fund the indolence of the Greek banking sector is particularly troubling and most of all the delay of decisions regarding mergers and capital increases. They warn that Greece might repeat the mistake it made with the government bonds in October last year when the new government of George Papandreou instead of immediately begining to sell while the spread-index was still significantly lower, it decided to make statements which gave a signal for the speculators on the international markets to begin to attack.
    In the public space appear various scenarios. The forthcoming merger of Eurobank EFG with Alpha Bank was refuted by a top manager of the first at the International Thessaloniki Fair, but the Greek media continue to argue that the contacts between the Spiros Latsis and George Costopoulos continue. Moreover, most unexpectedly for many people Spiros Latsis himself appeared in the Greek capital on Tuesday. Of course, the official reason for the visit is the opening of a museum in the name of his father Yiannis Latsis somewhere near Elefsina. But the wealthy people are rarely so sentimental. Currently, financial analysts estimated as 50 to 50 the chances for the merger of Alpha and Eurobank.

This week, the government advisers from Lazard, HSBC and the London branch of Deutsche Βank have to rule over the proposal of Piraeus Bank to buy the Agricultural Bank and Postal Fund. Other rumors on the other hand claim that the president of Piraeus Michalis Salas is negotiating with Andreas Vgenopoulos about a merger with Marfin. The only certain thing is that the National Bank of Greece proceeds with an increase in its capital by 2.8 billion euros through the sale of 20 percent of its shares to the Turkish Finanz Bank.

    International analysts, however, are concerned by the decision of the Bank of Greece in cooperation with the triple, of course, not to announce officially the results of the stress-test-s which the Greek financial institutions will have to undergo in mid-October. Unlike the preceding stress-test-es of the European Commission, which took place in July, the Greek ones are customized to the profile of each bank, its investments abroad, its opening to the Greek government bonds and also its credit policy.