Recap extension hopes dashed
Greek banks have been told to speed up procedures for their recapitalization in order to meet the deadlines of the timetable set in the bailout agreement the government has signed with its international creditors.
The Hellenic Financial Stability Fund (HFSF) sent letters to all four systemic banks last week asking them to complete their share capital increases in time, as everything will need to have finished by end-April. The letters stirred things up among bank chiefs as they have arrived just ahead of a visit by the creditors’ representatives to Athens next week.
Sources say that the Hellenic Bank Association has had significant contacts over the last few weeks with European institutions in order to inform all involved about the state of the local credit system and the significance of the recapitalization. The banks’ central argument has been that the country’s economic conditions have changed considerably since the drafting of the procedure’s timetable, so the planning will need to factor in these changes.
The bank chiefs’ talk of the need for a change in the recap terms has reportedly disturbed both the government and its creditors. Two weeks ago, following press reports on the subject of an extension to the recap process, Finance Minister Yannis Stournaras intervened to note that it would not be easy to change the law concerning the banks’ recapitalization. He stressed that all advantages of the existing agreement should be used. The letters sent by the HFSF only served to remind banks of their obligations, fund sources said.
Eurobank and Piraeus were told to speed up their recapitalizations.