Gov’t cuts it fine with re­cap bill

Draft law set to be tabled by Fri­day, as ECB will an­nounce banks’ stress tests on Satur­day morn­ing

Kathimerini English - - Front Page - BY YIAN­NIS PAPADOYIANNIS

The gov­ern­ment has left it des­per­ately late for the vot­ing of the leg­isla­tive frame­work for the re­cap­i­tal­iza­tion of banks, al­though the bill should have cleared Par­lia­ment by Oc­to­ber 15, ac­cord­ing to the bailout agree­ment. Sources say that the draft law will be tabled in the next few days, and def­i­nitely by Fri­day, as the re­sults of the banks’ stress tests will be is­sued on Satur­day.

A num­ber of marathon meet­ings took place over the week­end be­tween gov­ern­ment of­fi­cials and the rep­re­sen­ta­tives of the coun­try’s cred­i­tors aimed at dis­cussing all the tech­ni­cal as­pects of the re­cap process as well as op­er­a­tional is­sues of the Hel­lenic Financial Sta­bil­ity Fund (HFSF) so that the draft law could be com­pleted, but it ap­pears that was not pos­si­ble.

Gov­ern­ment sources tried to al­lay con­cerns about the tight sched­ule, stress­ing that the bill would be im­me­di­ately tabled. Last Thurs­day, af­ter a cabi­net meet­ing, the gov­ern­ment had an­nounced that the re­cap­i­tal­iza­tion bill was ready. It is clear, how­ever, that there has been a sig­nif­i­cant de­lay, de­spite the fact that the threat of a de­posits hair­cut hangs over any fail­ure to com­plete the process by the end of the year.

The Euro­pean Cen­tral Bank will an­nounce the re­sults of the Greek banks’ stress tests at 11.30 a.m. on Satur­day, Greek time. Frank­furt will pub­lish the cap­i­tal re­quire­ments of each bank based on the base­line and ad­verse sce­nar­ios of the ex­er­cise.

An­a­lysts say that the cap­i­tal re­quire­ments to stem from the ad­verse sce­nario and the as­set qual­ity re­view (ADR) will add up to al­most 15 bil­lion eu­ros, and af­ter the de-

1.1011 duc­tion of the re­struc­tur­ing plans’ value, fu­ture prof­its etc, the fi­nal sum of the re­quire­ments will come to 9-10 bil­lion.

The Euro­pean author­i­ties will then ask lenders to pro­ceed to share cap­i­tal in­creases to cover the above amount. If they fail to do so, which is the most likely sce­nario, but draw a to­tal of 5.5 bil­lion eu­ros and have the rest cov­ered by the state, they will avoid both na­tion­al­iza­tion and the threat of liq­ui­da­tion.

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