Saturday October 25, 2014 Search
Weather | Athens
19o C
12o 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)  
TAIPED waits for green light from Eurostat
Trade deficit shrinks on big drop in imports
SMEs unable to claim subsidies
Taxes kept growing in second quarter
Athens, Nicosia satisfied by EU leaders´ stance toward Ankara
A reference in Friday’s European Council conclusions calling on Turkey to respect Cyprus’s sovereign rights left Athens and Nicosia content with the outcome of the European Union leaders’ su...
Suspended policeman chief suspect in cousin’s murder
A 27-year-old police officer who has been suspended from duty since 2013 for extortion, is being treated as the chief suspect in a murder committed in a suburb of Piraeus on Thursday. Police...
Inside News
BASKETBALL
A win is a win is a win for Olympiakos
A bad Olympiakos defeated a worse Laboral Kutxa 63-57 to make it two out of two in the Euroleague on Friday. In a game where the two teams had an overall field goal rate of about one in thre...
SOCCER
Panathinaikos snatches point at Eindhoven
Panathinaikos offered its fans a glimpse of its glorious past in European competitions snatching a draw at PSV Eindhoven, on an otherwise bad night for Greek soccer in the Europa League, as ...
Inside Sports
COMMENTARY
Tension for tension’s sake?
It is evident that Turkish President Recep Tayyip Erdogan feeds off tension. He would barely have achieved as much as he has – and prevailed – if he had not been so keen to confront a series...
EDITORIAL
Testing ground
The Regional Authority of Attica is a good testing ground for politicians who appear to thrive on accusations to prove whether they can actually solve major problems of a practical nature. T...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. A win is a win is a win for Olympiakos
2. TAIPED waits for green light from Eurostat
3. Trade deficit shrinks on big drop in imports
4. SMEs unable to claim subsidies
5. Taxes kept growing in second quarter
6. Thessaloniki Port expects 2014 to be record year
more news
Today
This Week
1. Woman killed in tram accident in Floisvo, south of Athens
2. Clocks to go back 1 hour on Sunday
3. Venizelos slams Turkey for 'flagrant violation of international law' off Cyprus
4. ECB vies for third time lucky in European stress tests
5. Cyprus GDP upgrade seen as boosting bailout exit plans
6. ECB bank assessment to show 6-billion-euro capital gap, Citi says
Today
This Week
1. The past, present and future of the Greek debt crisis
2. Greece’s closed society is central to its current malaise
3. Greece must stick to reforms, says Schaeuble
4. At least 11 banks to fail European stress tests, three in Greece, report says
5. Cyprus to block Turkey's EU talks after EEZ violation
6. Samaras’s crumbling Greek exit lacks backing from economists
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.