Tuesday September 2, 2014 Search
Weather | Athens
29o C
23o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Nicosia asks Athens to relieve it of Egnatia burden

By Panayiotis Tsaggaris

Prime Minister Antonis Samaras has reportedly promised Cypriot President Dimitris Christofias that he will consider his request for the transformation of Greek lender Marfin Egnatia Bank from a local branch of Cyprus Popular Bank back into a subsidiary of the Nicosia-based lender. That would relieve the Cypriot government of having to guarantee some 4 billion euros of bad loans that it seems to have shouldered overnight a year-and-a-half ago.

In March 2011 the central banks of Greece and Cyprus approved the merger of Cyprus Popular and Marfin Egnatia, when the latter’s portfolio included bad loans totaling some 4 billion euros. Kathimerini has been informed by sources that this burden, concerning loans that were for the acquisition of shares and had no collateral or other forms of guarantee, was immediately transferred from Greece’s central bank to its Cypriot counterpart.

The same sources told Kathimerini that loans worth hundreds of millions of euros were provided to “monasteries and convents” without adequate collateral or in some cases without any guarantee at all.

It is clear that had Marfin Egnatia remained a subsidiary, it would have continued to be monitored by the Bank of Greece. That would automatically mean that the guarantees for deposits in Greece would be the obligation of Hellenic Deposit Protection Fund and the subsidiary would have the right to recapitalization from the Hellenic Financial Stability Fund (HFSF) as well as access to the Greek emergency liquidity assistance (ELA) to tackle any cash flow problems.

A Cypriot diplomatic source has informed Kathimerini that Christofias asked Samaras during the former’s recent visit to Athens to annul the March 2011 decision so that the Republic of Cyprus will not have to cover the amount of 4 billion euros. Samaras reportedly appeared willing to examine the issue.

Kathimerini also understands that the governor of the Bank of Greece, Giorgos Provopoulos, recently told Greek state officials that “as a matter of principle,” he is not against Marfin Egnatia becoming a subsidiary again.

Another source said that Athens-listed Cyprus Popular is conducting a legal check to establish whether the March 2011 decision could be canceled. The issue has generated intense discussions within the Cypriot banking sector about whether the Republic of Cyprus would have been able to avoid any losses had Marfin Egnatia remained as a subsidiary of Cyprus Popular Bank, or whether Cyprus would still have had to cover the losses regardless of Marfin Egnatia’s status.

The question remains as to how the Bank of Greece allowed Marfin Egnatia -- which, as a Greek subsidiary of Cyprus Popular, was under its own jurisdiction -- to issue loans without collateral or other forms of guarantee, and how the Central Bank of Cyprus approved the transformation of Marfin Egnatia from a subsidiary into a local branch during a period when the Greek lender had so many loans without guarantees in its portfolio.

ekathimerini.com , Thursday October 11, 2012 (22:11)  
Greece needs private debt overhaul, Piraeus Bank CEO says
Cheap energy pulls down eurozone producer prices in July
Greece sells 1.14 bln euros of 6-month T-bills, yield eases
New committee formed to assess progress of deregulation in closed-shop professions
Reforms to dominate Greek talks in Paris, debt relief talks later, says source
Greece hopes to assuage concerns it is slipping up on reforms during talks with European and IMF inspectors in Paris this week, with debt relief talks unlikely to start until October, a seni...
Trial over 2013 murder of pawn merchant starts in Athens
The trial over the April 2013 murder of a 30-year-old man running a family-owned pawn shop in the suburb of Dafni began on Monday with the four defendants admitting to their role in the deat...
Inside News
SOCCER
Greece defender Papadopoulos fires parting shot at Michel
International defender Avraam Papadopoulos suddenly quit Olympiakos on Monday to join Turkish club Trabzonspor, and fired a parting shot at Olympiakos manager Michel putting the blame on the...
SOCCER
Unlikely pair on the Super League summit
Veria and Atromitos are sitting pretty at the top of the Super League after the second round of games thanks to their away wins that made them the only clubs to have six points, as champion ...
Inside Sports
COMMENTARY
Politicized archaeology
Let us suppose that archaeologists discover that the tomb uncovered in Amphipolis was not the resting place of Roxana or Nearchos, but of Alexander the Great. Let us assume, that is, that ar...
EDITORIAL
Moderating expectations
Politics is, to a great extent, all about managing expectations, and anyone who raises that bar too high or too fast is at serious risk of disappointing and losing the people’s favor. In a c...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Greece needs private debt overhaul, Piraeus Bank CEO says
2. Cheap energy pulls down eurozone producer prices in July
3. Greece sells 1.14 bln euros of 6-month T-bills, yield eases
4. Reforms to dominate Greek talks in Paris, debt relief talks later, says source
5. Greece defender Papadopoulos fires parting shot at Michel
6. Unlikely pair on the Super League summit
more news
Today
This Week
1. Politicized archaeology
2. Rain and storms with hail expected in many parts of Greece
3. Moderating expectations
4. New committee formed to assess progress of deregulation in closed-shop professions
5. Trial over 2013 murder of pawn merchant starts in Athens
6. Reforms to dominate Greek talks in Paris, debt relief talks later, says source
Today
This Week
1. Thessaloniki mayor Boutaris sworn in wearing yellow star amid Golden Dawn protests
2. The battle against progress
3. Attack on gay couple in Athens leaves one man needing surgery
4. Strong undersea quake occurs off island of Milos, felt in Athens
5. Greek quest for debt relief faces hurdles in Paris
6. Hardouvelis, ECB executive discuss bank program, stress tests
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.